Writing for The Evening Standard, the MP for Morley and Outwood, said the housing market was in need of reform, from planning laws to the influx of overseas investors buying up prime property.
“House prices are soaring out of reach for many. And while foreign investors continue to buy up multi-million-pound properties, for everyone else the prospect of an early rise in mortgage rates is now on the cards,” said Balls.
Labour would offer ‘Treasury guarantees’ to boost house building he said and get 200,000 new homes built each year by the end of the next Parliament, according to plans.
He promised to reform the Help to Buy scheme and work to produce a Help to Build scheme for small and medium-sized builders. The Labour party would also reform planning permission laws to allow quicker building and towns to grow.
He continued that the rising numbers of foreign property are “not only pushing up prices but I believe are also failing to make a proper tax contribution in this country.”
“This unfairness needs to be put right. That is why Labour’s shadow housing minister Emma Reynolds has set out plans to tackle the number of empty homes, including ensuring properties are always advertised in this country first.”
To achieve a ‘fair’ outcome Labour proposes a Mansion tax on properties worth over £2m, with an annual rise on the limit to follow property inflation to exclude modest properties.
Tax relief or deferred payment until property sale will be offered to low-income, equity-rich occupants, for example, long-standing residents in areas that have seen dramatic rises in property values.
Balls proposed a banded system to avoid detailed annual valuations, as in the Liberal Democrat proposals.
A banded system – £2-£5m, £5-10m, £10-20m and over £20m – replicating the Government’s new tax on properties bought through companies would make sense, he said.
He called for the government to publish detailed work on how a mansion tax would work. “Ministers should publish it now so that we can have a proper debate on how to do this in a fair and proportionate way,” he said.
