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I haven't thought very deeply about it, but surely it would help with generational inequality of boomers living in town houses that they bought for £5k in 1975 and are now valued at £2.5m, while generation rent fork out £2k a month for a shoe box? If they are going to live in relative luxury compared to others, surely fair that they take on a higher tax load to pay for public services that are to the benefit of all?
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I haven't thought very deeply about it, but surely it would help with generational inequality of boomers living in town houses that they bought for £5k in 1975 and are now valued at £2.5m, while generation rent fork out £2k a month for a shoe box? If they are going to live in relative luxury compared to others, surely fair that they take on a higher tax load to pay for public services that are to the benefit of all?
Is it fair? I suspect most of them just wanted somewhere to live that wouldn't cost them rent. I don't care if my house stalls in value as long as the rest of the housing market does the same.
I agree about generational inequality, but I'm not sure how to get round the basic Catch-22 of tax on primary dwellings, which is that it would tax people on the ownership of an asset that they might have to sell in order to afford the tax that is being levied on it. Essentially (unlike any other asset that I can think of) you're basically telling people "you're not allowed to own that unless you're rich enough to pay an arbitrary cost that the state will impose on you." That's not a complaint against state intervention at some level, I'm just not convinced a primary property tax is it.
ffm
I think the increase in the value of a house is a bit of a red herring. Averaged out across the whole country a 3-bed family home has the exact value of a 3-bed family home i.e., if you buy a house then the value you realise from selling it will allow you to buy only a house of exactly the same size (actually slightly less because of SDLT and various other costs associated with selling, buying and moving). You could sell it in order to get another property that you want more, for example by moving to an area where prices are proportionally lower and getting a bigger place, or moving to a more desirable area and getting a smaller place, but a house is always just worth (in and of itself) a house.
It seems quite odd to tax people just for ownership of something that is really just a functional object for your everyday life (it would be a bit like taxing shoes or a bed), not least because you're already taxed on the income you use to pay for it and quite often have to take on significant debt to own that asset.
The real value of a house is not the gain in its value, but the fact that the money you put into paying off your mortgage is still, in effect, yours (i.e., embedded in the value of the house you can then sell) rather than spaffed away in rent. There are other intangible benefits like peace of mind, but also some tangible losses (SDLT, maintenance etc.). I don't know what the solution is, but the huge disparity in the personal financial impact of owning vs. renting might be better addressed by reducing the latter.