Online from: 1988
|Title:||Property taxation and teh economy after the Barker review (of housing supply in the UK)|
|Journal:||The Economic Journal, Mar 2005, Volume: 115 Issue: 502 pp.99-117 (19 pages)|
|Keywords:||Council Tax, Housing, Land, Pricing, Property Tax, Stamp Duty, United Kingdom|
|Article type:||Conceptual paper|
|Reference:||34AJ667 (Permanent URL)|
Design/methodology/approach - explains how critical house prices are to the UK econpomy, notably in terms of maintaining stability and of joining the eurozone. Adds problems of regional resource allocation, economic inequality and social exclusion. Notes that user costs fall in areas where house prices rise, and rise in poorer areas; while the incidence of Council Tax is higher in poorer areas than in richer areas. Points out that land taxes encourage land hoarding in the expectation of lower taxes or higher prices in the future. Attacks Stamp Duty as a regressive tax and business rates as taxing development rather than land.
Findings - proposes a new land tax that is phased in gradually so as to allow individuals to adjust, and that is not related to the use to which the land is put, but reflects the shortage of land in local areas. Suggests the majority of the revenue is taken by central government to replace Stamp Duty and to ensure fluctuations are not borne locally.
Research limitations/implications - points out that the Barker Review related only to part of the problem and dealt with land tax inadequately. Rejects local income tax, because abolishing property taxes would raise house price inflation.
Originality/value - presents a much more comprehensive and rational approach to the housing problem than other commentators.