There have been various reports indicating that the taxation of property is under scrutiny by the Treasury ahead of the Autumn Budget, with arguably the most eye-catching proposal being a restriction of capital gains tax (CGT) relief on the sale of high-value homes.

As a number of commentators have pointed out, based on the reports suggesting how such a charge could operate, there are a number of factors that might result in a smaller amount of revenue being raised than may be hoped for.

This includes the fact that house prices in prime central London postcodes have declined by over 20% since their peak in 2014. In addition, anyone who has moved home in the last decade could have effectively banked a tax-free gain already and inadvertently avoided or mitigated a charge.

Then there is the complexity of how the rules would apply and the associated practical issues of calculating a gain. For example, many individuals who might have reasonably assumed that their main home would always remain outside the scope of CGT may have made improvements to their home but not retained all the relevant receipts of the costs incurred. There could be many more disputes arising with HMRC over the level of capital gain.

The rumoured measures seem to be aimed at trying to unlock some of the land and property value built up over decades. This is driven in part by the lack of housing supply and population growth, and justified by some as a reasonable target on grounds it represents an unearned windfall.

Given the anticipated issues with the rumoured proposals, it would be a surprise if other options for property and land tax reform were not being explored, potentially going beyond what has been discussed in the media. Indeed, the measures the government is currently considering may be informed by the efforts of previous governments to tax landowners benefitting from property development gains, a concept known as “land value capture”.

Given that housebuilding is a key part of the government’s strategy for growth, the roaming eye of the Treasury could once again settle on landowners benefitting from a windfall in uplifted land values, courtesy of obtaining planning permission for new homes.

Gaining planning permission for the development of land, whether for residential or commercial use, can dramatically increase its value. According to government statistics published in February 2015, the average increase in the value of land in England (excluding London), when granted planning permission for residential use, was from £21,000 per hectare to £1.95m per hectare. The consequence of this has been to make some landowners incredibly wealthy. In 2015, it was suggested that £9.3bn of such land value uplift was left uncaptured each year.

The principle of “land value capture” is that it allows the government or a local authority to effectively remove all or part of the windfall to landowners from increased land values. There are various ways in which this has been explored in the past, although few routes have been successful.

Compulsory purchase is one method, and as part of this, a cap can be placed on the value of the land (eg 10 times its agricultural value). Legislation has already been enacted to enable this, which could be applied more widely.

The government could also look to increase developer contributions, such as the Community Infrastructure Levy, but this comes with the risk that developers may refuse to develop less viable sites, resulting in a reduction in housebuilding overall.

Windfall taxes could also be used. Currently, the higher rate of CGT stands at 24% and there is speculation that Rachel Reeves could further increase this rate in the upcoming Budget. However, higher rates or an additional tax targeting substantial windfalls on the sale of land could also be considered.

One lesson that may be drawn from previous efforts to capture land and property value is that it cannot go too far or it could be self-defeating in slowing the number of property transactions. Ideally, it would also be simple to administer. That may sound remarkably like a mirror image tax to stamp duty land tax, but imposed on the sellers instead of buyers.

While some homeowners may try to rush through a transaction before the Budget, there is little many landowners can do but wait and see as it can be a lengthy process to obtain planning for development. Although the government has not recently indicated any intention to introduce new mechanisms to capture the increases in land value, the fiscal landscape can change quickly in these more volatile times and there may be temptation for the Treasury to consider some of these alternative options.