Property Taxes

Debate between Freddie van Mierlo and Daisy Cooper

Wednesday 3rd September 2025 Commons Chamber

[Daisy Cooper (St Albans) (LD)]

I begin by adding my voice and that of my party to the others who have welcomed the hon. Member for Chipping Barnet (Dan Tomlinson) to the Front Bench.

Like so many other things, property taxes in this country are broken and hopelessly out of date. Council tax is regressive; stamp duty is a transaction tax that slows growth; and business rates are a tax on bricks and mortar that bear no relationship whatever to the amount of money a business might make. It is quite extraordinary that the official Opposition have chosen to debate property taxes, given that I can barely remember any discussion at all in the last Parliament about things that they wanted to tackle in that area. In particular, they did not tackle any of the three things I have mentioned. If it is true that the Labour Government are now thinking about biting the bullet and bringing forward fairer alternatives to those things, I commend them for looking at the issue. However, I caution the Government not to repeat the jobs tax fiasco. Going after property simply as a Treasury tax grab will be a disaster if the Government do not set out a broader vision for property taxation and for housing as a whole.

We agree with parts of the Conservatives’ motion today. We agree with their call to rule out capital gains tax on primary residences. In the general election, we Liberal Democrats set out a way of reforming capital gains tax to make it fairer, one that would reduce that tax for two thirds of people already paying it and increase it for the super-wealthy. That would have raised more revenue than the carte blanche measures that the Labour Government have pursued, so we agree with that part of the motion. We also agree with the Conservatives that the property levy that has been described in newspapers would be a disaster. It would choke up the housing market, stop people from downsizing and slow economic growth, so I hope that if Ministers are considering any of these things, they look at the reaction there has been.

[Freddie van Mierlo]

In my constituency of Henley and Thame, the average house price is £515,000. Does my hon. Friend agree that the property tax described by the Government so far would be a tax on the south-east and London?

[Daisy Cooper]

I absolutely agree with my hon. Friend. He will know, as I do from my constituency of St Albans, that many people have spent decades and decades living in their property, which they might have bought for a few thousand pounds. It might now be worth a huge amount, but they might be asset-rich and cash-poor. People in that situation are incredibly scared by the reports they have seen in newspapers of a potential tax of the kind that has been described.

There are parts of the Conservatives’ motion we agree with, however we are open in principle to the idea of a land value tax. In principle, land value taxes can create more fairness in the system and produce a more efficient use of land, but of course, the devil is always in the detail. It would depend on the design of any land value tax and any exemptions that might be introduced. We Liberal Democrats have previously set out policies for how we would replace the broken business rates system with a commercial landowner levy. That is an example of how the principle of land value could be applied to commercial land.