Land for the Many, the independent report commissioned for the Labour Party (published in June), contains proposals that may feature in the Labour manifesto for the next general election which, whilst not due until 2022, may come a lot sooner given the bumpy ride ahead through Brexit that could yet destabilise the government and the new Prime Minister.
The proposals contained in the report are wide-ranging, covering many aspects of property ownership, planning, development and tax, and if carried through, their consequences would herald radical change to the way we use and invest in land and property.
The proposals recommend:
- Transparency of property ownership, with open data on land ownership, including identities of beneficial owners.
- Discouraging land and housing from being treated as financial assets.
- Setting up a Common Ground Trust to stop reform triggering a sharp reversal in land values, as well as helping prospective buyers to purchase homes.
- Ending the buy-to-let boom.
The report also recommends a programme of ‘progressive and efficient’ tax reform. This would cover:
- The introduction of a progressive property tax in place of the current Council Tax, with annual valuations, a higher rate for second and empty homes, and a surcharge on properties owned by those not resident in the UK for tax purposes.
- Phasing out Stamp Duty Land Tax for those buying residential property for their own occupation.
- Increasing capital gains tax for second homes and investment properties.
- Abolishing inheritance tax and replacing it with a lifetime gift tax levied on the recipients.
- Replacing business rates with a land value tax.
The report also puts forward some specific recommendations in relation to farming and the rural sector:
- A review of tax exemptions given to landowners, and a restraint on “fiscal privileges” that would not affect family farms.
- Consideration of a removal of tax exemptions for woodlands and forestry.
- Promoting wider access to farming.
- Encouraging community land trusts to buy land for farming, forestry and conservation.
- Creating a community land fund to enable £200 million of land to be in community ownership by 2030.
- Protecting agricultural ties on dwellings for land workers.
- Extending the planning system to cover major farmland and forestry decisions.
- Introducing a right to roam across all uncultivated land and water.
“From the perspective of our land-based clients, there are some areas of major interest and concern contained in these proposals. They present significant change not just in the way land and property is owned and managed, but also to restrict the incentives for owning property, changing how property is taxed, and restructuring the tax burden as it passes from one generation to the next.
“Some of the proposals mirror what has already taken place in Scotland, and indeed many aspects of the report are devolved, for example, right to roam, a community land fund, and promoting wider community ownership.
“But at the crux of all of this is the premise that property ownership should not be for investment purposes, and where it is, penalties will be deployed through the tax regime. Some aspects of the report do give cause for concern.
“Which of these proposals would be adopted by the Labour Party remains to be seen, but this could be an early indication of the direction of travel.”