House prices

They would only pay peanuts if the landlord was charging peanuts. That's not likely on a hugely expensive house.

Poll tax will generally cover the local government element, so people paying their way. DVLT would generally replace the proceeds of Stamp Duty. The government would have to choose the ratios and rates. It's above my pay grade!

People should NOT be encouraged to invest in single (or a few) property. It's generally a bad investment and not very productive. Buy a home. Then choose more sensible investments or take the risk of investing in property when we're trying to impact that per the thread.

It isn't the case that homeowners or people with large pensions are morally superior to those without these things. It's more that they shouldn't be penalised for doing the sensible thing that ultimately helps the rest of us as it relieves a burden from the State. You may not have worked harder than someone of the same age and income that chose to rent but ultimately you are now more securely housed and less likely to need government assistance.

Am I? Why would I not need the NHS more? Or Attendance Allowance? Pension Credit? Universal credit? What if I have more dc?

They were! We bought a 3 bed house in zone 5 (West London) in 1986 for £54k.
In 1983 you could buy a studio flat in Z5 in SE London for £17k, I know because I went to view one.

You're right. LVT is a specific concept so I'll just call it DLVT - Developed Land Value Tax.

Buying a home is great. Investing in property is a very specialised action. Most investors probably wouldn't even "invest" in a single property because it is so illiquid. Many homeowners did little or nothing to acquire their wealth. Some inherited (didn't work hard) and some benefited from out of control house price growth (again, didn't work hard). Taxing based on value is a very progressive tax regime.

I agree that a sudden change would be unnecessarily harsh. It should be promoted and phased in over a set period, say 5 years.

As with any change there will be winners and losers. We're trying to affect house prices in this topic and bring in a more equitable system. You're focused on the losers and not thinking of the winners such as young FTB's who would benefit from lower prices.

@Dangermouse43
Haven't you heard that Australia has a housing crisis too, and NZ.
The COL in Australia is really high too.
Also consider that Australia is suffering very badly due to climate change and large parts of it are already inhospitable due to heat/drought.

It's not moralising. It's a fact that we all have decisions to make about how we spend our limited money. These decisions can have long term implications. The government encourages people to invest in their pensions not because they want you to have a really fabulous old age but because they want to reduce the chance that you will be old and destitute and therefore need more publicly funded services to support you. Buying a house isn't really too different than this.

It isn't the case that homeowners or people with large pensions are morally superior to those without these things. It's more that they shouldn't be penalised for doing the sensible thing that ultimately helps the rest of us as it relieves a burden from the State. You may not have worked harder than someone of the same age and income that chose to rent but ultimately you are now more securely housed and less likely to need government assistance.

A communist home owner, an interesting concept.
Why should the government get all your estate when you die? What's the point of working hard, saving and being frugal? You may as well blow the lot on holidays and eating out.

If you have worked hard and invested your money in property when you could have frittered it away then is it fair that you then get taxed so heavily for this?

Always the moralising around home ownership & renting? worked hard vs feckless, etc I haven’t worked any harder then plenty of others who are still renting just because my house went up in value…

So someone renting a hugely expensive house from a landlord could potentially pay peanuts in your model? They are benefitting from all the services that are provided by the local government so why on earth can't they be expected to pay their way? Meanwhile someone with much less money who has chosen to invest in a home has to pay LVT which will be the bulk of their bill?

This is what I mean about what is 'fair' and 'equitable'. Renters are not automatically poorer than homeowners. People should be encouraged to invest their money into buying and improving their homes rather than to spend money on holidays and cars that will not retain their value and ultimately increase the likelihood that if these people fall into more difficult financial times they will be more likely to lose their rented home and need to rely on the state.

No, LVT is a specific economic concept that works in a specific way. A government is free to impose whatever tax it wants but it isn't LVT if it starts factoring in the value of the building built on the land.

What is 'fair' and 'equitable' is completely subjective. If you have worked hard and invested your money in property when you could have frittered it away then is it fair that you then get taxed so heavily for this? These people have arguably made themselves more financially secure and less likely to be a burden on the state and yet you want to tax them further for simply owning an expensive property?

There are also pretty extensive unintended consequences to suddenly imposing huge tax increases on property owners. Many people that aren't homeowners have a stake in the property market through their pension funds. An LVT would place a huge burden on these funds.

Sometimes life gets in the way. Friends were planning to downsize, then their son’s marriage abruptly ended, he moved back in with them (ex got marital home) and he has the children two or three nights a week. So they need the extra rooms. 🤷‍♀️

Maybe look around a bit and you will see that it isn't only the UK where this is happening. I couldn't find a house here (NZ) for some of the cheaper prices I have seen in the UK.

Absolutely!!

Presumably the Land Value Tax would be payable by the freeholder, not the leaseholder? That’s an excellent idea.

People have the right to choose to live where they want, but the government should not subsidise people living in unsuitable properties.

It's good to see that the winter fuel payment has now been stopped, because this was another subsidy propping pensioners up in unsuitable houses.

Did you mean to sound so smug?

Yes, the same people who had access to these 50k houses in the 80s are now expecting their own kids and grandkids to buy them for half a million. One guess as to which generation they are... 🙄🙄🙄🙄

until as a country we start building enough homes to create an oversupply then prices will not come down significantly
With all of the vested interest in this it is unlikely to happen and it would not help the economy with negative equity etc

Prices will drop when people stop buying

LVT will work in the way in which a government chooses to implement it. In my view, two equivalent parcels of land - one with a mansion and one with a ramshackle bungalow - would pay different amounts: their overall values being different. You are taking the expression LVT too literally. It can be set up in the most equitable and logical way possible.

Well I did say ignore farms, forestry, etc for now. We're talking about the general principle. I would expect different classes of land to attract different rates.

It's a great point, but THAT poll tax took no account (as far as I remember) of house worth. In my model the poll tax would be a much smaller amount or proportion of the overall bill. It just feels fair that every adult enjoying council services should pay the same amount (ignoring the question of reliefs for specific cases).

The thing is though - as a society we do need to start incentivising people to live in houses that are the right size for them. Nobody should be FORCED to downsize but it should be encouraged and considered the norm.

I hate comments like this. It dehumanises the pensioners who have just as might right to live in their home as anyone else. They live near friends, family and support networks and may have lived in the same home for fifty years or more. What right do you have to take all that away from someone because it’s essentially in your best interests and not theirs?

No. I think that you are missing the combined effect. Yes, they would pay the same poll tax on the 1-bed but they would be paying far less LVT given the lower value of the one bed.

I haven't stipulated how much of the overall tax would come from the poll tax and how much would come from the LVT. In truth, there's no point trying to work that out until the principle Is agreed. But, it could be something like £50 pm per adult for the poll tax and the rest made up by LVT.