Property  

Labour proposes major reform of housing market

Under this, empty and second homes would automatically be taxed a higher rate and a surcharge would apply on properties owned by those who are not resident in the UK for tax purposes.

Labour would also propose that stamp duty land tax should be phased out for those buying homes to live in themselves and that capital gains tax for second homes and investment properties should be increased. 

Under the new reforms, inheritance tax would be replaced with a lifetime gifts tax levied on the recipient.

A lifetime gifts tax would be levied on the gifts received above a lifetime allowance of £125,000. When this lifetime limit is reached, any income from gifts would be taxed annually at the same rate as income.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: "Labour's proposals are no real surprise as they are along the lines of similar ideas which have been previously mooted.

"Although some people may be scared by the prospect, some of the ideas have merit, particularly regarding the need to modernise the current outdated council tax system.

"Ensuring that upper bands are added and regular revaluations take place would make it fairer for all as current limits have not kept pace with inflation. 

"As for the other measures, not many people would take issue with stable prices and more affordable homes but pulling that particular rabbit out of the hat has always proved difficult in the past.

"Killing market forces and the ability of the private sector to generate much-needed housing for all will remain important unless the public sector is going to take over the majority of housing provision."

imogen.tew@ft.com

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