A press release from Labour Land Campaign:
The Tory’s proposal to cut inheritance tax on homes valued at £1 million means even more subsidies for the rich
The Labour Land Campaign says the Conservative party’s latest policy announcement to remove inheritance tax on homes worth up to£1 millionis outrageous.
With Council Tax bills for mansions in Mayfair at no more than £2,124.66 per annum, home owners are already extremely privileged with regard to taxation and have been since the demise of the Domestic Rating System. This is part of the cause of house price inflation.
House prices have, once again, reached an unsustainable level but the owners have done nothing to earn this increase in their wealth.
As well as a crisis for those unfortunates who are not on the ‘housing ladder’, do we not have a major problem of wealth inequality in the UK? And is not inheritance of houses one of the main drivers of this trend?
It should be realised that a good part of the value of any property – and all of the increase in value over the last period – is land value that has been created by the whole of society from public and private investments that we fund as taxpayers, consumers and investors.
Heather Wetzel, Vice Chair of the Labour Land Campaign says:
“the land under our homes was provided by nature and the value of that land has been generated from continual public and private investment in our public transport networks, roads, schools, health care, parks, commerce etc. The Tories’ latest policy is giving another subsidy – up to £400,000 – to the richest in the UK at the expense of our NHS and othervital public services.
“We need to shift taxes off incomes and on to the unearned incomes land owners receive by taxing the value of all land in the
UK. Then, instead of the richest land owners taking the unearned income they receive from ‘owning’ this natural resource, land speculation would stop and empty buildings and idle development sites would be brought into full use.
“Most politicians and economists ignore the fact that homes actually have two values – the value of the building and the value of the land it is located on. Location value differs according to the level of investment in local infrastructure, public services and business. For example taxpayers from all over the UK have contributed to the building of Crossrail that is seeing the value of the land under homes in its catchment area rise enormously. This land value should be returned to the public purse to replace those taxes that penalise work and good investments and certainly not go to those inheriting the property. This latest Tory policy is bad, unjust and is yet another
policy that benefits the richest in the UK at the expense of the poorest.”
The Labour Land Campaign campaigns for a tax system that is fair,unavoidable and redistributive and one that collects natural resource
wealth including land wealth which the whole of society creates, to use to maintain and develop our public services.
We advocate the reduction or abolition of those negative taxes that discriminate against poorer people and regions of low investment and replace them with an annual Land Value Tax that will capture land value that results from public and private investments which goes as unearned income to land owners.
We say the current tax system is skewed in favour of the rich, multinationals and London and the South East of England atthe expense
of people on low incomes, small and medium sized businesses and regions
of low investment.