I have a feeling that Mark Wadsworth will be approving – at least in part – Oliver Kamm’s piece in the Times. In it, he makes some of the same points as Mark. However, I have some issues with the assumptions made. This, for example:
The mythology of home ownership diverts resources from investment in companies that make things or provide services. It encourages people to commute long distances so that they don’t have to go through the expense and inconvenience of moving home. It ossifies the labour market by deterring people from moving jobs. And it destroys the art of conversation. There would be less pollution, higher productivity and more wealth if only the superstition that home ownership is the route to riches were broken.
My own situation gives lie to this assumption. I am returning to the UK at the turn of the year and will take up residence in my old home in Bristol. In the past week, I have accepted a new job based in Purfleet. I will not be moving to Purfleet. This has nothing to do with home ownerism, but to do with my preferring the west country to the home counties. I have no plans to move to Essex either now or in the future.
My home is not, nor has it ever been, a route to riches. I have seen no wealth as a consequence of ownership as the increase in value has not been realised. Had we been able to sell before moving to France, then, yes, we would have realised it – although perhaps it’s worth pointing out here that our French property is worth precisely what we paid for it seven years ago and if we do decide to sell, we will be making an overall loss.
As it is, that “wealth” is unseen. It is a home. We have lived in it, and we will live in it and I object vigorously to any social manipulation by people or governments who think they know best where I should live and in what type of home I should live. What part of “it’s none of your business” do they not understand? If I choose to live in Bristol and work in Essex, that is my concern, not Kamm’s and not the government’s. No amount of social engineering will change this. I will live where I choose to live and if that involves a long commute or staying away from home to work, then that is what I will do.
The big flaw in Kamm’s argument though – that CGT should be incurred on selling one’s primary residence – is that it would deter people from moving rather than the opposite as he claims. Kamm is assuming that people would rent in order to be able to move about more freely. This may be true of some, but I would never rent as it would mean being beholden to a landlord. My home is my castle, I do not expect to have to ask a landlord if I may re-decorate, keep pets or carry out significant changes to the garden , for example.
Kamm’s proposal would certainly deter me from moving as it would make it more costly. And, frankly, we should all be paying less tax, not finding an excuse for raising more.
Ta for link. Oli Kamm is a decent bloke, but people who suggest CGT on housing (whether main residence or second home) are missing the point – it would distort the market even more than Stamp Duty Land Tax, and raise bugger all money.
The way forward is LVT. Which does not mean paying more tax if you use it to replace existing property and wealth taxes (Council Tax, IHT, SD, SDLT, CGT, TV licence, IPT and so on and so forth).
PS, you need a tag for “Home-Owner-Ism”, which is the bundle of economic policies blithely pursued by successive UK governments which ultimately ensure that fewer and fewer young people can afford to buy a home to start a family.
.-= My last blog ..We Own Land! Give Us Money! =-.
It would increase the gap for those trading up, so would definitely distort the market.
He is also way off the ball regarding commuting. People live in places they like, which may not necessarily be close to work. Many of my erstwhile colleagues lived in places like Northampton and commuted to London. They didn’t live there because it was difficult or expensive in London, they merely didn’t want to live in London. Neither did I, which is why I put up with the commute for two years. I recently met a chap who works in Bletchley and lives in Crewe – he commutes daily. I asked him if he had any plans to move. No, he told me, he likes living in Crewe, thank you very much. It has bugger all to do with housing, the cost and difficulty of moving or any of those related issues. It has to do with where people want to live – which may be nowhere near where they work. The future for me is going to be more of the same.
Thanks Mr Longrider, you are on the mark with this one.
My house is nice (I would think so, I built it myself!), I have no idea what it’s worth because it has never been sold, and I don’t really care anyway, since I have no intention of moving.
I don’t keep it because it makes me rich (how could it? And it’s quite the opposite when the maintenance bills roll in), but because it’s mine lock stock and barrel, and nobody can take it away from me however impoverished I may become in future old age. That’s security, and it’s important.
Of course, if some toad comes along and imposes Land Value Tax, I’ll possibly be out on the street. Naming no names, you understand…
Most people are in a house because a] they like it b] they can afford it c] they want security of tenure, as we all do.
.-= My last blog ..Hamster =-.
‘What part of “it’s none of your business” do they not understand?’
All of it.
.-= My last blog ..The Tesco Temperance League =-.
Somewhat missing from the article is the commuting/as the crow flies distance from ‘home’ to ‘work’.
Google maps places Bristol to Purfleet as about 150 miles and 3hrs drive. Assuming I have the right points.
I await correction if commuting time is less than 6 hours for a Monday-Friday job.
.-= My last blog ..Magical, revolutionary, and at an unbelievable price… =-.
On a good run you can do it in about five. That’s why I don’t intend to do it on a daily basis 😉