Professor Niamh Moloney:

Our terms of reference specifically asked us to look at the interaction between tax and welfare and the housing system. I will go back a little to the framing principle of the report, which was that when we look at housing and property, the most efficient, stable and equitable way of approaching this is through predictable and steady recurrent taxes in this area. That is because it is very difficult to design targeted tax relief and expenditures in this area. We discuss this a little in the report. Specifically with help-to-buy, it is a tax expenditure measure which is intervening in the housing market. Our view was that it is best for tax not to be used in that way in the housing market; that it can have distortions, bring volatility into the market and it is on the demand side and is feeding demand into the housing market. Clearly, housing is a hugely complex issue and, as the report shows, there are different levers the Government can use in this area but the view of the commission was that the tax lever is really about predictable, stable, recurrent taxation that minimises volatility in the housing market. For that reason, we saw help-to-buy as more of a demand-side measure which, given where we are now, had come it its natural end. Our focus is on how the tax system generally can work effectively in the property market.