MPC member moots a housing bubble tax

BANK of England policymaker Adam Posen yesterday called for taxes on British homeowners like capital gains tax and stamp duty to be hiked in line with house price inflation, in a bid to prevent another housing bubble.<br /><br />Interest rates are too blunt an instrument to prevent boom and bust in the housing market, Posen said. Instead, the Treasury should consider raising taxes on homeowners if house prices rise too quickly.<br /><br />&ldquo;We should be able to set up something like a Tobin tax for real estate transactions... it would mean having already existing title fees, capital gains taxes, stamp and transfer taxes, varying over time in line with price developments in the housing market more broadly,&rdquo; Posen, a member of the Monetary Policy Committee said.