The centrist Social Market Foundation think tank has brought forward a new policy proposal to levy “tens of billions of pounds of new taxes” on people selling houses. Essentially the plan is to replace what is widely considered Britain’s worst tax (stamp duty) with a similar duty that falls on the seller rather than the buyer. Revolutionary.

Stamp Duty is currently levied at 5% on properties up to a million pounds. The SMF is proposing a 10% “property capital gains tax” on the difference between the price a property was bought at and the price it is sold for, snatching they estimate £421 billion from homeowners over the next 25 years. It’s easy to see how this will particularly punish granny, with all her lifetime capital likely tied up in the former family home, when she downsizes the house bought decades ago. Are they trying to further freeze the already gunged up housing market?

Apart from this being electoral suicide, this is a terrible idea that will undermine the good that capital formation by families does for society. For most ordinary people the major capital asset is the family home. Wonks should stop trying to tax and fiddle about with the housing stock that already exists. The only way to really bring down prices is to increase supply…