Labour says stamp duty receipts and other tax income from properties in the capital should go to the Mayor, Sadiq Kahn, to spend on services across the capital.
Currently stamp duty revenue goes to the Treasury to contribute to national government spending.
But now Labour’s London Assembly Spokesperson for Housing, Tom Copley AM, says: “Compared to other major world cities, London government is infantalised by national government, with almost no tax raising powers available to the Mayor or boroughs.”
Only yesterday Foxtons reported a massive 23 per cent slump in sales, blaming - amongst other things - high levels of stamp duty on properties at the higher end of the market.
Copley claims that London has been let down by a government “unwilling to deliver anything more than warm words, and failing abysmally to support councils in getting building again.”
He says: “Devolving stamp duty is a start. But we can go further still. Devolving the full suite of property taxes to the capital – including full control over business rates and the power to trial a land value tax – would put us in the best possible place to deliver the maximum level of genuinely affordable homes."
He concludes: “We've not built enough homes in London since governments of the past decided that it wasn't the job of the state to provide housing. We've seen the cost of that choice in rising homelessness, overcrowding and poverty. London's councils and London's Mayor are already trying to change that, but could do so much more given the necessary powers and funding.”
Khan says he wants to use the money chiefly for social housing.
He currently receives around £0.7 billion a year from national government to invest in affordable housing but claims he needs four times that amount - £2.7 billion a year - to build social rented and affordable homes.
Khan’s office calculates that the capital generates £3.4 billion in stamp duty receipts.
“London's housing landscape has worsened dramatically over the past 30 years, and we now risk a whole generation of Londoners being blocked from enjoying the benefits of a good quality, genuinely affordable home....London’s rocketing house prices mean we are contributing billions of pounds in stamp duty to the Treasury, when we could be using it to build new social rented and other genuinely affordable homes. Control of stamp duty has been devolved to Scotland and Wales and it’s vital that ministers devolve it to London too” says Khan.
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IMHO, people buying expensive property in London today are playing Russian roulette. Mrs May's Government was within a few mins of collapse two weeks ago. A General Election looks a very high probability in the Autumn. Then we will see Mr Corbyn in #10. How will they set the new Land Tax level? Well if I was sitting in a £1.75 house in Parsons Green that I had just bought I would be pretty nervous. 3% of value pa was the number floated in 2015. I hope those buyers have a spare £40-50k a year in post tax cash income to cover their Luxury Property tax. At least on the upside, the deluge of people trying to sell to avoid it might unblock the market a bit!
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