UK homeowners who leave their properties empty should pay council tax bills worth 500% of current levels, Lib Dem leader Sir Vince Cable has proposed.
The aggressive plan aims to address the country’s housing shortage, after a study by the Lib Dem party earlier this year found there are more than 11,000 houses and flats in the UK that have been empty for more than 10 years.
Many of the empty high-end apartments and luxury mansions in and around London belong to foreigners and wealthy Brits as second homes.
In a speech at the Royal Institute of British Architects, reported by Mansion Global, Sir Vince called for a combination of government-led schemes to boost construction to around 300,000 new homes per year and punitive measures on speculative home ownership.
“These problems are well-rehearsed and much lamented, but there is little recognition that radical change will be necessary if the crisis in housing is to be addressed in our lifetime,” he said.
He added that around half of the necessary 300,000 units were delivered last year.
The plan would involve cracking down on absentee homeowners by increasing the amount they can be charged in council taxes from 200% of the local rate to 500%.
Sir Vince has demanded loans of up to £2,000 to help people without cash in the bank to pay the deposit on a rental property.
Sir Vince also suggested overseas buyers pay a levy on a portion of their property value or a surcharge in stamp duty.
Legislation allowing local authorities to double council tax premiums on empty homes was introduced in Parliament in March.
Chancellor Philip Hammond said at the autumn Budget that the new legislation would give local authorities the “power to charge a 100% council tax premium on empty properties”.
Critics, however, said the legislation would do little to deter extremely wealthy “buy-to-leave” buyers.
Sir Steve Bullock, London Councils’ housing spokesman, told LGC after the Budget announcement last November that council tax changes would not make much difference to the overall situation in the capital.
“Council tax is a minor issue because if you are sitting on a property in London you are sitting on a valuable asset. If we could charge 10 times the normal amount that might start to shift some of these people,” Sir Steve said.
Others have argued that restricting transactions in the luxury sector will do little to increase affordable housing stock.
Will Forster, Mayor of Woking, supported the latest proposals, saying: “When we have people homeless and even more people struggling with the high cost of housing, it is a scandal that so many homes are sitting empty.”
DealMakerz thinks the 500% tax is a good idea in principle, but it is extreme. It may push away foreign investors while failing to increase the availability of properties that the everyday Brit requires.
Much of the focus is on London, whereas research published by the Lib Dem party in January actually showed the areas with the largest number of homes empty for six months or more were Durham (6,502), Leeds (5,724), Bradford (4,144), Cornwall (3,273) and Liverpool (3,093).