Reforming property tax: Dampening further property speculation in the housing crisis

Depending on the increases implemented and the extent to which the number of transactions were impacted, these reforms could also raise an additional £3.4-£5.7bn in 2024/25.1 This could potentially more than treble the size of government expenditure on social and affordable house building, enough to deliver grant funding for an additional 18,600-31,100 new social homes.2 The case for property tax. [...] For the surcharge to deliver on its objectives, the government should raise the tax to, as a minimum, the point at which it starts to act as a deterrent for further speculation. [...] This is dwarfed by the 241,000 transactions that attracted the 3% HRAD rate for multiple home 15 Reforming Property Tax: Dampening property speculation in the housing crisis owners,55 with a further 37,000 transactions in Scotland and Wales attracting their equivalent surcharges.56 The impact of reforming the HRAD therefore offers even greater scope for curbing property speculation, raising revenu. [...] When devising the policy, the government anticipated that around 10% of all transactions would incur the charge.57 Yet in England and Northern Ireland, transactions incurring the charge occupied the same proportion of all transactions in 2022/23 as they did in 2017/18 (22% once the first quarter is discounted), suggesting that their relative strength in the property market has not been curtailed. [...] 17 Reforming Property Tax: Dampening property speculation in the housing crisis UK ministers’ own stated objectives for introducing the HRAD were to “support home ownership and first-time buyers”.58 As with the NRSDLT, to make further inroads into the competitive advantage of property speculators and deliver on this objective in England, the HRAD should be increased further, by at least aligning i.