Britain needs to reform its council tax system, build more houses and make changes to the Help to Buy scheme to stop the property boom getting out of control, the European commission has warned.
The EU’s executive body urged the government to reform the “regressive” council tax system as taxes are relatively higher on low-value homes than high-value ones.
The commission also called on the coalition to bring more people into paying tax to help with deficit reduction measures which have so far been “heavily skewed” towards spending cuts.
It warned in its 2014 economic policy proposals for the UK that demand for housing was outstripping supply and that action was needed to increase the stock.
“The authorities should continue to monitor house prices and mortgage indebtedness and stand ready to deploy appropriate measures, including adjusting the Help to Buy 2 (loan guarantee) scheme,” the commission said.
“Reforms to the taxation of land and property should be considered to alleviate distortions in the housing market. At the moment, increasing property values are not translated into higher property taxes as the property value roll has not been updated since 1991 and taxes on higher-value property are lower than on lower-value property in relative terms.”
The commission said the UK should “remove distortions in property taxation by regularly updating the valuation of property and reduce the regressivity of the band and rates within the council tax system” and “continue efforts to increase the supply of housing”.
via The Guardian
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Latest posts by Alfonso Esparza (see all)
- Market Rally Still Going Low Holiday Volumes Awaiting Start of 2020 - 27 December 2019
- Market Awaits China Retaliation on Trade - 29 November 2019
- Alibaba to Close Order Book Ahead of Huge IPO - 18 November 2019