The UK government’s current review of the housing market could result in developers having to pay a land tax, as ways are sought to help supply meet demand and iron out the recent patterns of boom and slump.
The review, which is being conducted by Kate Barker of the Bank of England’s monetary policy committee, aims to establish "the role of competition, capacity, technology and finance of the house-building industry, and the interaction of these factors with the planning system and the Government's sustainable development objectives", according to the Financial Times.
Her initial findings are expected to be published in time for Chancellor Gordon Brown’s pre-Budget statement on December 10. More comprehensive recommendations are then expected to be announced in the 2004 budget.
One possible outcome that may be pursued by the government is the imposition of a land holding tax on developers designed to encourage them to build on it more quickly, and thus help meet the demand for homes which has driven house prices up dramatically in the past couple of years.
However, developers are unlikely to take to such a proposition, and the industry claims it already contributes around £5 billion per year in taxes to the government, says the Financial Times.
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