Conservatives have claimed that the Labour manifesto’s proposed review of council tax and its possible replacement by a Land Value Tax - sometimes dubbed a ‘garden tax’ - could lead to massive tax increases for some Sussex residents.
It is an allegation fiercely denied by Labour candidates.
The Labour manifesto states: “We will initiate a review into reforming council tax and business rates and consider new options such as a land value tax.”
Tories allege that in an area like Sussex where property and land prices are high this could result in a trebling of council tax for some homeowners.
They have described the measure, based on the value of land rather than property, as an ‘attack on homeowners’ and could force families to sell their gardens.
But Labour candidates across Sussex, such as Rebecca Cooper in Worthing West, have rebutted the suggestion that a land value tax would be levied at three per cent as ‘pure fiction and intended to scaremonger’.
Dr Cooper added: “There is no basis for this statement in the Labour Manifesto or any policy documents or discussion papers produced by the Labour Party on this subject.”
Tory Simon Kirby, seeking re-election in Brighton Kemptown, claimed that a three per cent levy on the value of the land would result in a yearly tax bill of £3,837 for an average family home in England, with London and the south east hit the hardest.
He warned that this could lead to plummeting house prices and negative equity, force homeowners to sell their family gardens, and would also affect agricultural land with ‘devastating consequences’ for farmers.
But Labour’s Lloyd Russell-Moyle, who is standing against Mr Kirby, said: “Labour has not discussed a so-called ‘garden tax’, does not have a ‘garden tax’ in its manifesto, will not introduce a ‘garden tax’, and does not recognise any of the claims made by the Tories.”
Kristy Adams, Tory candidate for Hove, described the land value tax as showing the ‘true colours of Labour’s extreme hard-left, high tax policies’, Emma Warman, Conservative candidate for Brighton Pavilion, warned of a ‘devastating’ impact on people with no savings and modest incomes, while Nick Herbert, Tory candidate for Arundel and South Downs, called it ‘just one more example of a failed tax and spend agenda that bankrupted Britain before and would do so again’.
Tony Dignum, Conservative leader of Chichester District Council, called a land value tax an ‘attack on homeowners’ and argued that families in areas like his would be hit ‘especially hard’ by ‘huge tax hikes’, due to the high cost of land.
Meanwhile Gillian Brown, Tory leader of Arun District Council, added: “These plans will send our council tax bills soaring, plunge people into negative equity and force families to build over their back gardens. Not something that the people of Arun deserve.
“It has always been a priority for Arun to keep the council tax as low as possible and provide value for money services for residents which is the right thing to do.”
Henry Smith, Conservative candidate in Crawley, said: “Jeremy Corbyn wants to hit working families with a bombshell of new taxes to pay for his reckless hard-left giveaways – from hiking up inheritance tax to taxing gardens.
“It turns out Labour’s magic money tree grows in your garden.”
But Tim Lunnon, standing for Labour against Mr Smith, said the figures quoted ‘do not come from the Labour Party or any official source’, adding: “It’s remarkable Henry Smith has the time to put together nonsense numbers condemning Labour for policies we haven’t proposed.
That time would be better spent ensuring we can keep our schools open and care for our elderly in their own age.”
The origin of the three per cent levy is believed to be from a report hosted on the website of Labour Land, a campaign group supporting a land value tax.
However this would only be charged on commercial and industrial properties, rented homes with the tax paid by the landowner and not the occupier, brownfield sites, second homes, and land banks in order to encourage development.
A lower figure of 0.85 per cent would be charged on ordinary homeowners.
Labour’s Alan Butcher, contesting Bognor Regis and Littlehampton, added: “It needs to be recognised that the reference to ‘land tax’ made in the manifesto is prefaced by ‘such as’ and is an example of a possible future alternative to both council tax and business rates and is not a Labour manifesto policy.
“It may be an option which may be considered, should a review of council tax and business rates be undertaken by a future Labour Government.
“Clearly the outcome of any such review would be subject to examination through the usual parliamentary processes.”
Several Labour candidates have argued strongly for a review of ‘unfair and inefficient’ council tax and business rates systems.
Peter Chowney, Labour’s candidate in Hastings and Rye and also leader of Hastings Borough Council, described how the current system is ‘chaotic, unfair and doesn’t work’, pushing the burden of taxation on those with smaller homes.
He felt there was a need to replace both business rates and council tax with ‘something more modern and rational’ with land value tax ‘one possible option’.
But he added: “But it makes no sense to say it could triple council tax bills. It could I suppose, but it could also halve them, or quarter them - it would depend on the level of the tax, and no level has been suggested by the Labour Party, in the manifesto, or by any shadow minister.”
His stance was echoed by Carrie Hynds, the Liberal Democrats’ candidate in Hove, who while critical of Labour’s plans for a ‘spending spree’ suggested the Tories ‘must realise that in the long-term a move towards a sensible land tax value system is needed’.
She said: “The Liberal Democrats believe that restoring links between tax and land will be healthy in the long run and help resolve the housing crisis.
“However, this must be done through proper reviews and consultation with the public to ensure low earners do not pay more than under the current system.”
Greg Mountain, standing for Labour in Mid Sussex, argued that Conservative austerity had ‘starved’ councils of funds and called for a system to ensure local authorities have the funds to provide vital services and everyone ‘carries the burden of taxation fairly’.
He labelled the idea a land-value tax would be an additional tax and be a greater burden a ‘myth’, adding: “Our current system is banded on the size of a property, but is not based on the market value of land.
“A land value tax replacing council tax would make administration easier and fairer. It would encourage development in places with lower value land. There is no proposal on a rate of tax.”
According to the Labour Party’s website: “Our plan is to see what needs to be done to ensure that working people don’t pay more.
“We’ll look at how we can make council tax fairer but we’ll not be introducing a separate land value tax on residential property.”