Councils ‘should apply New York-style property levy to fund housebuilding’

19 Jun 18

A New York-style property levy could give local authorities a multi-billion pound windfall to put toward housebuilding, the Association for Consultancy and Engineering has said.

In a report, the ACE argued that aping the American scheme could “kick-start a housing revolution”.

In New York State, a Real Property Transfer Tax levies 1% on the sale or transfer of property valued at less than $500,000, and 1.425% if the value is more.

Reflecting this, ACE proposed that English councils levy a 1% tax on the sale or transfer of property worth £350,000 or less and 1.425% on those worth more. If applied, this could raise £2.16bn.

ACE chief executive Nelson Ogunshakin said: “Our proposals are mirrored on a proven model and could enable local authorities around the country to share in the gains of the property market and receive the vital funds they need to kick-start a housing revolution and invest in its supporting infrastructure, so all can benefit.

“In our view, local authorities are best placed to tackle the housing crisis and a property sales levy would ensure they have the tools at their disposal to do so.”

ACE’s report Unlocking housing: Invigorating local communities through placemaking, suggested that local authorities be required to develop placemaking strategies to inform local plans.

Placemaking – a people-centred and holistic approach to the planning, design and management of public space – should be included in the National Planning Policy Framework, according to the report.

It also called on local authorities to establish their own development companies.

Previously, PF reported that England would need to build 340,000 homes annually to deal with the housing crisis.

 The report noted that key to defeating the housing crisis is house building accompanied by local support.

“This support will only be forthcoming if the community feels they are engaged in the decision-making process, have some control over the design of the development and that the necessary supporting infrastructure investment is made” the report said.

Read PF’s blog from Andrew Walker, of the Local Government Information Unit, on how local authorities can reduce homelessness.

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