Homeowners in the U.K. who leave their properties empty should pay 500% in local council taxes, the leader of the British Liberal Democrats proposed on Tuesday.
Party leader Sir Vince Cable outlined an aggressive plan to address the country’s housing shortage. In a 30-minute speech at the Royal Institute of British Architects, he called for a combination of government-led schemes to boost construction to around 300,000 new homes per year and punitive measures on speculative home ownership.
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"These problems are well-rehearsed and much lamented, but there is little recognition that radical change will be necessary if the crisis in housing is to be addressed in our lifetime," he said, adding that around half of the necessary 300,000 units were delivered last year.
His plan, which party members echoed following the speech, includes cracking down on absentee homeowners by increasing the amount they can be charged in council taxes from 200% of the local rate to 500%. Council taxes are paid to the local municipality for services like garbage disposal and other public works.
"The sanctions for leaving homes empty should be strengthened, with fiscal measures to incentivize domestic use," Mr. Cable said Tuesday morning.
In February, the party released the findings of a housing market study, which found that there are more than 11,000 houses and flats in the U.K that have been empty for more than 10 years—a flashpoint statistic given the country’s shortage.
Many of these empty homes, high-end apartments or luxury mansions in and around London belong to foreigners and wealthy Brits as second homes, pied-a-terres or capital gains investments.
Mr. Cable also suggested overseas buyers specifically pay a levy on a portion of their property value or a surcharge in stamp duty.
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While the strategies Mr. Cable outlined were only that and not law, the government already taxes high-end and second-home owners, a level of stamp duty that continues to raise the ire of the luxury housing industry.
Property brokers and market analysts attribute subdued luxury activity in the country, especially in expensive areas like London, to discouragingly high stamp duty. Critics of crackdowns on foreign buyers say restricting transactions in the luxury sector do little to increase affordable housing stock.
Local authorities already have the mandate to charge homeowners up to 200% of the local council tax if their property is furnished and unoccupied for more than 12 months.
Other Liberal Democrats spoke out in support of Mr. Cable’s suggestions, including Will Forster, mayor of Woking, a town on the southwestern edge of London, where there are about 700 empty homes.
"When we have people homeless and even more people struggling with the high cost of housing, it is a scandal that so many homes are sitting empty," Mr. Forster said in a statement on Tuesday.