A welfare state for landlords

This essay is very interesting:

In terms of privately rented housing in the last 25 years, the single biggest change in housing law was effected by the Housing Act 1988. This abolished rent control from January 15th 1989 and brought in the Assured Shorthold Tenancy, the most common form of private rental agreement today. Its impact and knock on effects have been enormous. Problems with high rents, inflated housing benefit levels, high levels of tenant debt lack of security and summary repossession all derived from this piece of legislation.

And the problem of median rents isn’t even mentioned.

Tax loophole for second home owners to be closed

The EU is forcing the British government to end tax breaks on owning second homes.  Not that you’d know it looking at the headlines:

• Holiday home owners face annual ’stealth charge’ of thousands of pounds (Daily Mail)
  
• Second home owners face stealth tax in Pre-Budget Report (Telegraph)
  

This story is being reported in entirely the wrong way.  Tax breaks need to be justified, and second home owners would seem to be a unlikely lot for a break given the size of fiscal deficit we are facing.  Given that we supposedly face a housing shortage:

• Housing shortage creates underclass (Daily Mail)
• Village life under threat due to lack of affordable homes (Telegraph)

you would think removing a tax break for holiday homes might actually be a good idea that would help rural communities by reducing demand on scarce housing.   However, those journalists seem incapable of looking into even their own archives.

This is the tip of the Iceberg when it comes to the bad shape of property tax in the UK.  I recently heard of two retired couples who would rather bounce around in their huge homes for a few more years than pay the £50,000 stamp duty bill they will face when selling.  This is exactly the wrong incentive - moving house creates employment for many trades, facilitates labour mobility and allows people to free up housing that is too large for them.  Current tax policy actively discourages this. Even worse, it makes tax receipts dependent on how many people move house, which is at an all time low.   Time to tax housing properly, as it is in every other developed country.