Gove ally proposed tax measures to curb second homes

A FRONTBENCH ally of Michael Gove has previously proposed that tax measures be used to increase home ownership, it has emerged, amid speculation over a potential government crackdown on second properties.

Neil O’brien, who was appointed a minister at Housing, Communities and Local Government this week, has been a proponent of using taxes to curb new buy-to-let and second home purchases.

Last year he used two articles for

Conservativehome, the Tory grassroots website, to set out his support for measures that favour “owning over renting”.

Mr O’brien’s policy expertise is held in high esteem by the Prime Minister, who drafted him in as his Downing Street “levelling up” adviser earlier this year, and Mr Gove, the new Housing Secretary, with whom he shares past links to the Policy Exchange think tank.

Mr Gove has also highlighted to fellow Tory MPS how striking it is that only 15 per cent of house price inflation in the past 20 years derives from a lack of supply, The Times reported yesterday.

It has prompted speculation Mr Gove may look at tweaking rules on credit and buy-to-let to help solve the housing crisis. It is thought he is currently taking stock of the policy options and has yet to make any decisions, however.

Tory MPS have noted that Mr Gove’s reported interest in this area appears to align with points put forward by Mr O’brien last year.

In February 2020, Mr O’brien highlighted the role of second and rental properties in the “relentless collapse” in home ownership, from 71 per cent to 63 per cent, between 2002 and 2015. He wrote: “In 2015, we started phasing in limited changes to the tax treatment of buy-to-let and second homes. It worked. The collapse stopped… We must use the tax system to encourage new investments to flow into companies, not into inflating house prices.”

Any change in the rules should apply only to new second or rental homes, he stressed. Last August, Mr O’brien went on to argue that while undersupply of new housing is a factor in declining home ownership, tax advantages that have resulted in a ballooning rented sector are also playing a large part.

While his views on home ownership have been outspoken, Mr O’brien will focus on levelling up in his new ministerial role, while fellow minister Chris Pincher will retain responsibility for housing policy, it is understood.

Asked about the idea that Mr Gove could look at tax measures to curb new second and rented homes, a government source said: “Tax is a matter for the Chancellor. Michael is focused on working with MPS to review and improve the planning reforms and leading the levelling up agenda across government.”