Taxing problem

Want a bet that we’ll ever pay the Lib Dems’ new environmental taxes? Thought not. Ming Campbell’s victory today at the party conference is not going to lead to a slump in sales of Chelsea Tractors any time soon. But it’s important nonetheless: the Lib Dems may be part of a coalition government in just two years’ time and its policy debates mirror those in other parties.

What’s this all got to do with housing? Quite a lot if you scratch beneath the surface of the debate over scrapping the 50 per cent tax rate for high earners. The policy document proposes a series of changes to Britain’s absurd system of property taxation:

• Scrapping the council tax in favour of local income tax
• A property tax not yet specified but perhaps based on the Danish system of a 1 per cent national property tax with a threshhold below which it is not payable
• Reforming stamp duty to remove the slab system under which the rate escalates dramatically at £250,000 and £500,000

The policy paper does leave plenty of wriggle room but at least it kicks off the debate.