Land-value tax is the way forward
To help solve the housing crisis you suggest a land-value tax in your leading article* (3 January). This would not only reduce the profits from speculation in housing it would make land more available and bring into productive use thousands of empty properties and vacant land.
But land-value tax should not be an additional tax but a replacement for council tax, VAT and taxes on wages and capital.
Land value is created by the community and, by raising public revenue in this way, it provides an essential component in a progressive tax policy that encourages economic development and ensures sustainable growth.
It will indeed take more than words to make property affordable, and unless land-value tax is given serious thought, I fear that housing will be denied to thousands of young people for many years.
Michael J Hawes
*There are ways that the state can curb prices. It could increase taxes on housing, perhaps by imposing capital gains tax on first homes, or a land value tax. This would reduce the profits from speculation in housing. It could build (or encourage the building of) more houses. Increasing the supply of housing would depress prices. It could reform the rental laws to make long-term renting easier (as it is on the Continent). Rent reform would reduce the profitability of being a landlord, thus taking some air out of the buy-to-let market which has contributed substantially to house price gains in recent years.