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In Defence of Home Ownerism

Put capital gains tax on all homes | Oliver Kamm - Times Online
Our culture is deeply imbued with the belief that owner-occupation is not just a choice but a virtue.

Leave aside his specious arguments about how ownership ties people down (I think, but haven't got the figures, that owners are more mobile in moving than council tenants) and his tired old cliche about how boring property conversations are, it is important to point out that property ownership is a virtue, a very English virtue.

Owning your own corner of this land imbues responsibility, cohesiveness, care and respect. All virtues, I would add ambition, thrift and family to the list.

Some abacus bashers may bang on about super duper fancy taxes that would crush the curse of Land Values - I think proposing any new tax is dangerous, it only encourages the politicians - but they ignore the wider prosperity that home ownership brings. And while living in communal blocks may suit our European friends it isn't the Anglo Saxon way and Home Ownerism should and must be defended as an Englishman's right to own his own castle.

Comments

The key thing is, did a lack of CGT on first homes cause the house prices to shoot to the moon? The answer is largely no imo. Reckless credit expansion did.

It was the credit expansion that sucked money from business investment - a mania in the banking sector where they were taking profits sooner and sooner and sooner with CDOs and relying on house prices increasing year on year. That said there was also plenty of business lending going on, especially for management buyouts but, the ease with which credit *was* available meant even failing businesses could be kept on life support rather than being taken out of the market and their assets redeployed more effectively.

Are the gains on housing any different to interest on savings? To my mind they aren't but I don't think savings interest should be taxed either! Want to encourage saving and rebuild bank balance sheets? Exclude interest from taxation. I haven't 'earned' the interest but without my savings the bank wouldn't be able to lend to someone who pays for the privilege of borrowing.

So long as every piece of the chain - saver, banker, borrower - does their job properly it all works fine. Savers being cautious about who and where they put their money, bankers being cautious about who and where they lend to and transparent about the risks they are taking, and borrowers being cautious about how much they borrow and what for. Savers started being rate tarts, banks covered up the risks they were taking and borrowers were like kids in sweet shops.

"And while living in communal blocks may suit our European friends..."

Interestingly, almost the first thing European immigrants try to do once they've settled in Canada and have an income stream is: buy a house of their own.

This seems to be true for ALL immigrants to our country who are determined to advance themselves and their families. Owning property in the form of their own house, no matter how humble, is seen as a key step of that advancement.

To be sure, our provincial and municipal politicians get up to a variety of shenanigans when it comes to squeezing taxes out of property owners but even they know there's a line they cross at their peril. Any politicians here who attempted punitive taxes on property would find themselves leaving town at midnight on a rail, appropriately tarred and feathered.

I agree that home ownership is a very desirable thing that most people want, regardless of were they live. This is a major step for advancing or progressing. Thanks for sharing this great post.

"they ignore the wider prosperity that home ownership brings."

Which 'wider prosperity'? It's the same people selling each other the same houses for every higher prices - so this is just shifting debts to future generations in favour of spending by current generations. It is in no way different to the massive public sector debts they have racked up.

While owning your home is very nice indeed, there is no reason why a) this should be seen as a route to easy riches or
b) why it should be subsidised relative to earned income and production, which are very highly taxed.

I'm pro-home ownership, but we currently have a system (and the Conservatives are about to make it worse) which discourages people from owning homes, because no-one wants homes built next door to them.

That's the main benefit of a Land Value Tax - people would see a reduction in the value of their property (actually, the land, not the bricks) and receive a tax discount in return. It would nullify the disadvantages to them of having houses built next door and actually encourage development.

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