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July 24, 2007

Polly on Housing

Planning is only a small part of the story.

??

In the south and south east, the majority of the cost of a house is the right to build on the land. Not the land itself, not the construction of a house or flat, but the permission to build something on that one piece of land. Stating that the major part of the cost (OK, let's say "a" major part of the cost, shall we? More than 50%?) is a "small part" of the story is, well, a little disingenuous, shall we say?

Will Cooper stop the unfair tax incentive that lets landlords charge their mortgages against profits?

Gibberish. Rent is income. As with any other investment in a capital asset you're allowed to offset the interest you pay against that income before you declare your profits which are then taxed.

A US-style annual tax on expensive property would skim some froth and keep prices sane.

Polly m'dear. We already have this. It's called Council Tax.

But most tenants would rather be owners. Consider how few middle-class people choose renting for themselves or their children. The more people (both right and left) say that social tenants can't afford it, the more essential it is that ways are found to see most can.

Really, who would have thought it? Polly Toynbee as Maggie Thatcher: a property owning democracy?

July 24, 2007 in Idiotarians | Permalink

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Comments

How many of the middle-class choose whether their children rent or buy? I suspect such a choice is restricted to the more affluent middle-class types that Polly mixes with, the type of middle-class parent that chooses to help their offspring buy a house, and chooses to provide those same children with private education.

Posted by: Pete | Jul 24, 2007 10:23:21 AM

The cost of construction of a house bears little relation to what people are prepared to pay for it. However, one way of addressing this issue would be to introduce more stringent building standards, thereby raising new build to an Edwardian quality. This would eliminate some of the profit to be had from planning gain, without the necessity for any new tax, channelling buyers' money directly into high quality housing stock. Unfortunately, however, this is a very long term solution, and hence unlikely to be implemented by Government.

Posted by: Hilary Wade | Jul 24, 2007 10:48:39 AM

"unfair tax incentive"

Do you see what the Guardianistas are doing there? Anything that reduces your tax liability is a tax break (an "unfair" one naturally, since Gordon Brown over the last ten years successfully re-defined the word "fair" to mean "pay more tax").

By this logic failing to get a higher paid job or not working longer hours is "cheating" the nation of the taxes that would have been paid. And indeed Gordon Brown is on record saying that downshifting into a "lifestyle" business (e.g. giving up high paid high stress City job to flee to the country and set up a B&B) is a tax avoidance loophole.

Posted by: Kay Tie | Jul 24, 2007 7:13:12 PM