Jeremy Corbyn announced a set of sweeping tax changes off the back of a recent report from the Labour Party. The “land for many” report concludes a Labour government should replace council tax with a “progressive property tax” set nationally and paid by landlords. The plans would see those with larger homes and gardens pay more and will target homeowners, with tenants in rented properties exempt from the scheme.
But experts have hit out at Mr Corbyn’s latest announcement, claiming the plans amount to a “tax bombshell” for hard working homeowners.
The “progressive tax” plan – which would also scrap the single person discount – would take over from the current council tax bills.
The report said council tax was “regressive and unpopular” – adding the new proposals would help Labour to address “the problems and injustices of British society.”
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Under the plans, homeowners would be subject to a reformed tax with each of the top four bands of property by value taxed at progressively higher rates and “regularly updated”.
Rates – which would hit the top 40 percent of property by value – would be set nationally rather then by local councils.
And the single person discount, used for widows, pensioners and more, would be scrapped – with the report accusing the discount of encouraging the “over-consumption of housing”.
Those with a second home or homeowners not resident in the UK would be worst hit.
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The report claims the new tax would result in major government savings.
An excerpt reads: “This would result in significant administrative savings, lower levels of arrears and less court action.
“Unlike council tax, the progressive property tax rate would be based on regularly updated property values, and the rates would be set nationally, rather than locally determined.”
Housing Secretary James Brokenshire told The Daily Telegraph the proposals from Mr Corbyn were “deeply damaging”.
He said: “Labour will stop at nothing to hammer families with more tax and make home ownership a pipedream for future generations.
“Plans to seize land into public ownership also show Labour’s true colours of more and more state control.
“This tax bombshell for families would mean family homes with gardens paying far more and higher taxes on pensioners by abolishing the single person discount.”
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But despite the backlash, Labour ministers welcomed the findings of the report.
Jon Trickett, Shadow Cabinet Office minister said: “Concentration of land in the hands of a few has led to unwanted developments, unaffordable house prices, financial crises and environmental degradation.
“Labour is committed to tackling these head on and delivering a fundamental shift in wealth and power from the few to the many.”
The report aims to create a major shakeup in the property tax system to “discourage the use of homes as financial assets, reduce the tax paid by the majority of households, and encourage more efficient use of the housing stock”.