London's notorious housing crisis just got a radical proposed antidote: scrap stamp duty and council tax entirely, replacing them with an annual property wealth levy. A leading think tank tossed this bombshell into the capital's already simmering property debate.
The city's housing woes are, frankly, staggering. Homelessness isn't just an abstract concept; it's costing London £5.5 million a day. Record numbers live in temporary accommodation. House prices? A jaw-dropping 12 times average earnings – up from seven times in the early 2000s.
And the inequality? Stark. Average floor space per person did rise nearly 30% between 2004 and 2023. But that extra room? It went straight to the wealthiest. The top 20% income earners saw a 27% jump in their owned space; the bottom 40% barely scraped a 6% increase. This isn't just a shortage of homes; it's a widening chasm. Even businesses cry foul, claiming unaffordable housing chokes growth and talent.
The Proportional Property Tax (PPT) Vision
The Centre for London, behind this provocative report, isn't just pointing out problems. They've outlined a daring roadmap. Their 'Proportional Property Tax' (PPT) would be a percentage of a home's value. For properties up to £800,000, a base rate of 0.39% applies. Go above that? The rate incrementally climbs, reaching 0.82% for a £5 million estate. The goal? Encourage downsizing. Boost social housing funds. Help renters finally save a deposit.
Consider the impact. A £500,000 home in Greenwich might see annual PPT of £1,950, saving over £15,000 in a decade compared to current taxes. A £5 million Westminster mansion? £41,000 annually. But even those owners could save close to £87,000 over ten years. Renters? No more council tax, saving potentially £1,890 each year. First-time buyers could save £8,593. And for the 'asset-rich, cash-poor' elderly looking to downsize? A decade-long deferral option for the PPT. Genius? Or just necessary?
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