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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To think an annual property tax is incredibly unfair?

966 replies

Itchthescratch · 01/07/2026 10:06

I come from an area with low house prices. It is great! My friends can generally afford houses even with lower salaries as the earnings:house prices ratio is better. Rents are also lower so they have proportionately more disposable income.

I have moved to a more expensive area where house prices are higher and people have really had to push themselves to buy a property. Salaries are higher but not high enough to make up the difference. They have had to pay more stamp duty , pay more interest and have less disposable income each month.

I am really struggling to understand why my friends in the South should also automatically be paying more property tax under the new proposals being suggested by Burnham supporters? What is the justification? They would love to buy a large detached house for £300k like my friends from home but this isn't possible. It feels like they are being double penalised.

Just to add house prices haven't risen in real terms in the area in live in now for 20 years so the value of my friend's houses is simply money they have paid in.

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LipglossAndLies · 01/07/2026 16:40

My issue isn't really with Council Tax itself it's with what it's paying for.

The majority of my Council Tax goes towards adult social care. Given that most of us are likely to need some form of care during our lives, I don't think it should be funded through a property tax.

We already have a national system for funding things everyone benefits from, such as the state pension through National Insurance. I'd rather see adult social care funded nationally in a similar way, with everyone contributing through NI or another national tax.

Once you've taken adult social care out of Council Tax, then we can have a proper discussion about whether Council Tax should be replaced or reformed.

As a single person, I also find the current system hard to justify. Using a simplified example:

  • Council Tax on each house is £100.
  • A single occupier pays £75 after the 25% discount.
  • A household with two adults pays £100 in total, or £50 each.

Yet all three adults have the same entitlement to adult social care if they need it. In effect, the single person has contributed significantly more per person towards a service they have exactly the same right to receive.

I know this is a simplified example, but it illustrates the point. If we're funding services that benefit individuals, then every working adult should contribute equally towards them, regardless of how many adults happen to live in the same property.

I know the Community Charge ("Poll Tax") was deeply unpopular, but that was over 30 years ago and there were many reasons for its failure. The principle that every adult should contribute equally towards universal local services isn't necessarily wrong just because one implementation was.

That's why I'm not convinced a Land Value Tax solves the problem I'm describing. It changes what is being taxed the land instead of the property but it doesn't answer the bigger question of who should pay for adult social care. If anything, it still links the funding of a universal service to where someone lives rather than spreading the cost across the whole working population.

Itchthescratch · 01/07/2026 16:39

tommyhoundmum · 01/07/2026 16:37

I assumed it was an additional tax to Council Tax as it has not been possible to update the latter as intended..

No, I think it is intended to replace both council tax and stamp duty.

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tommyhoundmum · 01/07/2026 16:37

Itchthescratch · 01/07/2026 16:22

I think the only way it makes sense is if it became a national tax that was redistributed to local councils. Obviously this is literally the opposite of the devolution he seems obsessed with so I'm not sure how he will square that circle. If you do make council tax a debfacto national tax then councils will have even less incentive to control the huge overspend we are seeing already.

I assumed it was an additional tax to Council Tax as it has not been possible to update the latter as intended..

LlynTegid · 01/07/2026 16:36

Local income tax, and for business a local tax based on turnover, would be the fairest I think. However I can imagine a whinging about the marginal rate of income tax it would bring.

Council tax is simple and one of the cheapest to collect. I think there should be higher bands introduced.

suburburban · 01/07/2026 16:33

Ireallycantthinkofagoodone · 01/07/2026 16:28

I agree. I detest the current council tax system. It doesn’t take into account ability to pay, or the number of occupants in a property.

Poll tax was deeply unpopular, but only (I think) with people who were never previously required to contribute. We all use the services, so why shouldn’t the tax be per capita?

A neighbouring bungalow now has 4 bedrooms, 3 bathrooms, 2 kitchens and is occupied by 3 wage earners and a pensioner. It was previously down banded to C from D for a disabled person. It hasn’t been re-banded since being extended under new ownership. My bungalow has 3 bedrooms, 2 bathrooms, 1 kitchen and is band E. I am on my own now and mid-70’s. My CT is much higher despite the 25% reduction for single occupancy.

The LA is not interested in checking these anomalies.

Yes I think the poll tax would be fairer. Everyone should contribute

poetryandwine · 01/07/2026 16:33

Veronyk · 01/07/2026 10:46

It's definitely a good idea to get rid of stamp duty which is a stupid tax that stops old people downsizing and puts people off moving for job opportunities.

A property tax seems like a sensible alternative. Using your .48 percent figure, most people where I live would be paying less than their existing council tax, so I fear it will have to be a much bigger percentage.

Apologies if someone else has mentioned this already: lots of currently untaxed land, such as the large amount of undeveloped land builders are sitting on, would also be subject to LVT. The figure of 0.48% was chosen to be revenue neutral or slightly positive as against CT and stamp duty.

Itchthescratch · 01/07/2026 16:31

palran · 01/07/2026 16:26

I think part of the proposal is that renters won't have to pay, but the freeholder/landlord pays in respect of any rented properties they own. It's the same in some other countries that have a land/property tax.

However, given that without a doubt landlords will add the land tax onto the rent, in effect the renters will pay anyway!

Maybe there should be a cap on rent increases as a result of the land tax or something to prevent gouging by landlords. I haven't thought this through so cut me some slack here!

Why shouldn't renters effectively pay for the local services they use?

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Itchthescratch · 01/07/2026 16:29

RedRock41 · 01/07/2026 16:21

OP there’s only so much income can be taxed. It is progressive. Those with more valuable assets pay more. I agree that is right and fairer.

Those who will pay less will have more disposable income.

Edited

The definition of a progressive tax is usually linked to income i.e. One's ability to pay. This isn't a wealth tax as it doesn't target those with the most equity in their homes but those with the highest house value even if they only defacto only a very small percentage of the asset.

Basically it's not progressive under any definition.

Your last sentence is odd. We know those with lower house values will pay less for their mortgage and often therefore have more disposable income to fund a tax like this. Do you propose they pay more?

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Ireallycantthinkofagoodone · 01/07/2026 16:28

Serenity75 · 01/07/2026 10:22

I think a wealth tax is entirely fair. You are taxed in your wealth, if you have more wealth you pay more tax. But I also thought that the poll tax was fairer than council tax.

I agree. I detest the current council tax system. It doesn’t take into account ability to pay, or the number of occupants in a property.

Poll tax was deeply unpopular, but only (I think) with people who were never previously required to contribute. We all use the services, so why shouldn’t the tax be per capita?

A neighbouring bungalow now has 4 bedrooms, 3 bathrooms, 2 kitchens and is occupied by 3 wage earners and a pensioner. It was previously down banded to C from D for a disabled person. It hasn’t been re-banded since being extended under new ownership. My bungalow has 3 bedrooms, 2 bathrooms, 1 kitchen and is band E. I am on my own now and mid-70’s. My CT is much higher despite the 25% reduction for single occupancy.

The LA is not interested in checking these anomalies.

palran · 01/07/2026 16:26

I think part of the proposal is that renters won't have to pay, but the freeholder/landlord pays in respect of any rented properties they own. It's the same in some other countries that have a land/property tax.

However, given that without a doubt landlords will add the land tax onto the rent, in effect the renters will pay anyway!

Maybe there should be a cap on rent increases as a result of the land tax or something to prevent gouging by landlords. I haven't thought this through so cut me some slack here!

Itchthescratch · 01/07/2026 16:22

Pibs101 · 01/07/2026 16:17

I tried calculating what I would pay under this new scheme based on the 0.48% quoted earlier. Based on the sale of a flat in my block nearly two years ago I would be paying much less than I currently do even taking into account the single person discount that I currently get.

Surely the government wouldn’t want this, depending how many others are in a similar situation the council would be losing so much money. I don’t know maybe my maths is wrong.

I based this on the assumption it was a replacement tax if it’s additional that makes more sense from the council money making point of view.

Edited

I think the only way it makes sense is if it became a national tax that was redistributed to local councils. Obviously this is literally the opposite of the devolution he seems obsessed with so I'm not sure how he will square that circle. If you do make council tax a debfacto national tax then councils will have even less incentive to control the huge overspend we are seeing already.

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RedRock41 · 01/07/2026 16:21

Itchthescratch · 01/07/2026 15:55

This won't lead to a reduction in income tax or raise anymore money. It simply removes stamp duty and gives people in cheaper area a discount on their council tax and those in more expensive areas have to makeup the shortfall.

It is not aligned with income so isn't progressive

OP there’s only so much income can be taxed. It is progressive. Those with more valuable assets pay more. I agree that is right and fairer.

Those who will pay less will have more disposable income.

Pibs101 · 01/07/2026 16:17

I tried calculating what I would pay under this new scheme based on the 0.48% quoted earlier. Based on the sale of a flat in my block nearly two years ago I would be paying much less than I currently do even taking into account the single person discount that I currently get.

Surely the government wouldn’t want this, depending how many others are in a similar situation the council would be losing so much money. I don’t know maybe my maths is wrong.

I based this on the assumption it was a replacement tax if it’s additional that makes more sense from the council money making point of view.

Overworkedandknackered · 01/07/2026 16:04

It should be a fairer system, however they do it, perhaps it should be a set price per square foot of property you own? I have a 4 bed house that costs less than a 3 bed house in the same area because mine is over 3 floors so we have less living space than a traditional 4 bed.

Itchthescratch · 01/07/2026 16:00

TheLandlordsAreFrowning · 01/07/2026 15:56

That would not necessarily work out cheaper. In fact it can be the reverse.

If I moved to London and bought a property in Westminster worth many times my current one I'd pay a lot less council tax than I pay now.

Westminster is an interesting area. It is doing what Andy Burnham seems to love which is generating a lot of local revenue through business rates and parking. This is exactly what he wants to encourage and he wants local areas to keep the proceeds. It also has a smaller adult care bill and benefits from efficiencies in delivering local services like refuse collections.

Why should people in Westminster pay more Council Tax when they don't need to pay more to afford their local services? They will already pay a disproportionate amount of national taxes so it's not like they aren't paying their share in other ways.

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tommyhoundmum · 01/07/2026 15:59

Itchthescratch · 01/07/2026 10:18

The annual property tax being suggested is that everyone pays 0.48% if their property value each year. Do you think that's fair?

Of course it might not be implemented but this thread is about whether the concept is fair in itself

I worked out that in addition to the £2000 council tax I pay, I would also pay a further approx £1,800. to live in my 1 bedroom flat.

TheLandlordsAreFrowning · 01/07/2026 15:56

vintedandminted · 01/07/2026 15:31

No. If you think it's unfair, move to the North and buy a cheaper house and take advantage of the lower tax.

That would not necessarily work out cheaper. In fact it can be the reverse.

If I moved to London and bought a property in Westminster worth many times my current one I'd pay a lot less council tax than I pay now.

Itchthescratch · 01/07/2026 15:55

RedRock41 · 01/07/2026 15:52

Income has been too heavily taxed in recent years. Frozen personal allowances have led also to fiscal drag.

The problem is life for many these days is like playing monopoly when the board is already owned.

I like the proposal.

Many work hard, many don’t but renting families often have it the hardest. Not really fair they pay full council tax, whilst next door might own their house outright, be on means tested benefits and get council tax paid.

Inheritance too is not something that’s earned nor is increase in house equity or value. If wages are earned and fair game, those who have more assets should pay more.

There are winners and losers with every policy but for once, a progressive tax that could make things overall fairer. The millionaires can’t easily move a house abroad.

This won't lead to a reduction in income tax or raise anymore money. It simply removes stamp duty and gives people in cheaper area a discount on their council tax and those in more expensive areas have to makeup the shortfall.

It is not aligned with income so isn't progressive

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suburburban · 01/07/2026 15:54

Itchthescratch · 01/07/2026 15:18

You have no idea how they funded the purchase of their house. They could easily have less disposable income than you now.

Again, why should you pay less than someone with the equivalent type of house in another area. They don't own a mansion either. They might have kids and need that many bedrooms and need to stay local due to childcare etc. Why should they subsidise your local services?

Agree, they’re not necessarily wealthy but house price inflation makes it look this way

switch on Home in the Sun and many of the the purchasers seem to be from the North?

Itchthescratch · 01/07/2026 15:52

maltravers · 01/07/2026 15:50

Indeed, renters rents will go up (a lot in London) but the Landlord not the government will be blamed of course…Renting will become even more expensive, but owning will now be more expensive too!

All to give people that already benefit from cheaper house prices and lower rents an effective discount on their council tax. I honestly can't believe anyone thinks this is fair.

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RedRock41 · 01/07/2026 15:52

Income has been too heavily taxed in recent years. Frozen personal allowances have led also to fiscal drag.

The problem is life for many these days is like playing monopoly when the board is already owned.

I like the proposal.

Many work hard, many don’t but renting families often have it the hardest. Not really fair they pay full council tax, whilst next door might own their house outright, be on means tested benefits and get council tax paid.

Inheritance too is not something that’s earned nor is increase in house equity or value. If wages are earned and fair game, those who have more assets should pay more.

There are winners and losers with every policy but for once, a progressive tax that could make things overall fairer. The millionaires can’t easily move a house abroad.

BrokenWingsCantFly · 01/07/2026 15:51

Bellic · 01/07/2026 10:20

I tell you what I think is unfair. I live in Edinburgh. There was a thread on here recently about someone who wanted to downsize to reduce her mortgage. When added in all moving costs they would come to about £15k. If I wanted to downsize to say a 3 bed bungalow in a less attractive area I’d be paying £700k and my stamp duty alone would be £43,350. So I don’t move. Ever. It’s obviously a financially daft thing to do.

Our current tax system is preventing me from moving just because I live in an expensive area. It’s such a stupid system. It traps the elderly in their expensive, unsuitable housing, and stops people moving to change jobs. It’s flagged as the single most damaging tax for the UK economy.

The proposed tax would remove stamp duty, and get the same amount of tax out of everyone living in a street, not loads out of those who just moved there and not a lot out of others. It’s so much fairer than the current system.

And expensive areas generally mean higher income. £100k salary is fairly common in London. It’s no big deal though because it’s soon eaten up by the costs of living in a city. So Londoners paying higher council tax? Just add that to the higher house prices, commute, childcare etc and take it off the higher incomes.

Stamp duty doesn't really affect downsizers who have lived in their house for a long time though does it. Are you forgetting the massive tax free income the ones sitting in the more expensive houses will have gained in equity from their house price rising?
It is more unfair on the ones taking their 1st step or step up as we will be paying tax on the sellers profit. Should be scrapped and replaced with a capital gains tax for all, at a different rate to those who buy for profit

maltravers · 01/07/2026 15:50

chirrupybird · 01/07/2026 15:46

Renters rent will also have to go up if landlords have to pay more tax on their property, they are not running a charity.

Indeed, renters rents will go up (a lot in London) but the Landlord not the government will be blamed of course…Renting will become even more expensive, but owning will now be more expensive too!

Itchthescratch · 01/07/2026 15:50

RoseOliviaAu · 01/07/2026 15:36

But then the northerners would be priced out of their areas and would complain…

Exactly, I don't know why people don't understand that low house prices in an area can be a good thing, especially if they have never been high. Nobody with negative equity and housing is much more affordable.

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Itchthescratch · 01/07/2026 15:49

Bellic · 01/07/2026 15:20

You need to move away from the idea that council tax is a tax to pay for local services. It is to the extent to which it is paid to the council, but it isn’t as a rate which meets the cost of those services, otherwise councils in wealthy areas would be loaded (fewer people living in poverty with housing or social work needs). It’s just another tax. Instead of earnings it’s on assets held. Which is a good thing. We need to spread the tax take between earnings and assets out more. And I’m speaking as someone who’s bill would double if this was brought in.

Council tax is to pay for local services.

From the government's own website Council Tax is a tax paid to your local council(s) for the delivery of local services.

The tax is not redistributed at a national level and I don't know why you believe it is? This is why some councils can charge much lower rates.

How is taxing a house that I own only 10% of a tax on my assets? Will the bank pay the tax for the 90% of the asset that they have a claim on?

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