IFS Zooms In: The Economy How is tax damaging the housing market?
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Dec 18, 2024 
Join Stuart Adam, a Senior Economist at IFS specializing in housing taxation, and Tim Leunig, an economist from the London School of Economics with a rich advisory background, as they delve into the UK housing market's struggles. They discuss how taxes like stamp duty and council tax impact affordability and market dynamics. The conversation highlights inequities in the tax system, challenges for landlords, and proposes reforms to address the ongoing housing crisis. Discover how these tax policies shape housing choices and the broader economic landscape.
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Housing Market Challenges
- The UK housing market frustrates both renters and homeowners due to affordability and availability issues.
- The government has identified these failures as obstacles to economic growth.
Outdated Council Tax
- Council tax is based on property values from 1991, leading to significant discrepancies.
- This outdated system needs reform to reflect current market conditions.
Regressive Tax Base
- A regressive tax base is needed locally due to small local authorities.
- A progressive or proportional tax would cause richer individuals to move, impacting local tax revenue.