To think an annual property tax is incredibly unfair?

They have this in the Netherlands. There is also tax in relation to emptying bins/sewerage etc which is similar to council tax but lower.

First the current stamp duty tax is a really bad tax - it taxes transactions rather than value or capital gains. It therefore discourages people from downsizing and takes no account of any wealth or value creation.

That said an annual property wealth tax on paper sounds like a great idea. However in reality it would be a nightmare to manage and enforce. Let's say the annual tax is 0.5%. Owner A has a property worth £1m but with a £900k mortgage. Owner B has a property that they bought for £500k as a doer upper on a 50% mortgage and spent £300k on renovations over the years and it's now worth £1m and Owner C that bought a £100k house in 1980 and it's now worth £500k with no mortgage.

Under this policy :
Owner A has a "wealth" of £100k (£1m - £900k) but will pay £5k a year in wealth tax
Owner B has a wealth of £450k (£1m - £300k renovations - £250k debt) but pays £5k in wealth tax.
Owner C has a wealth of £500k but only pays £2.5 k in wealth tax.

Of course you could try to amend the policy to take account of how much mortgage debt there is or how much has been spent on home improvements etc but the administrative cost of this will start to outweigh the revenue generated from the tax.

A far simpler solution would be to simply apply capital gains tax to all properties including primary residence.

What guarantee is there that she will have paid off her mortgate?

My council tax bill is approximately 0.48% of my house’s value. I’d be really angry if I had to pay the same again in some fake ass made up property tax, made up so the government can steal even more of our ALREADY TAXED income.

That’s great for people looking to move, not necessarily for those who’ve just bought and paid stamp duty. But I agree in general this sounds better than stamp duty as it also makes it easier for people to move and free up houses

Use your ISA allowance. Can't blame the government if you're not using the tax avoidance schemes they provide.

Well because in 30 years time you both will have paid off your mortgages but your wealth will be substantial higher than your northern friends.

Ah well I expect they'll stuff it up before doing it and will get voted out.

Is the mortgage debt also an asset? Do you understand equity?

@Itchthescratch id love to know where you live if the property prices haven’t changed in 20 years. As far as I can see, house prices everywhere are up. Proportionally maybe, but definitely up.

Ah, if it's in addition, then the 2 together would represent about 20% of our pension income. Bugger that.

I haven't really had time to study the (proposed) proposal enough to comment yet. However, just thinking that other countries in Europe have property taxes AND Stamp Duty aswell as council type taxes in some cases.

I reckon there might be a combination of these in UK in the end. A vastly reduced SD maybe in addition to the land tax. As pp said, the SD yields billions, and that will have to be replaced somehow.

I'm reading the thread with interest!

I think a regional wealth tax would be fine. Take the average salary and index a wealth tax to that.

I live in the south. House is worth £550000. I'd be quids in at 0.48% of value instead of council tax? My council tax is a breathtaking £4k a year. We moved about 120 miles from one 4 bed to another exactly the same size, smaller garden. We went from a D to an F.

Some interesting discussion about property taxes on this podcast
Moving Home with Charlie |
https://www.podbean.com/ea/dir-gi8wx-2f1405a5

He should just stick to the devolution stuff. In theory demand on London properties goes down and other areas get growth and associated house price rises.

How does this give the government money to spend now?

It's not suggested that the property tax replaces Council Tax.

It would be in addition to Council tax and go into central government coffers, not local council funding.

I do wonder how it would work in places like some parts of Cornwall, where people might have bought a house on a low to average salary, stayed in the house years and now the value has rocketed.

I agree about the councll tax. I live alone in a Band A two up two down in a rough area. I get the 25% discount and i pay more than if I shared a Band D house. Only a couple of quid more a month but it does illustrate how unfair council tax is. I know very little about the proposed land tax (has it even been proposed?) but I do think that council tax which managed to be the strange offspring of domestic rates and the poll tax in that it combined property value with an acknowledgement of a discount for lone home dwellers needs to change .

So choose to move elsewhere, rent instead of buy and save instead...

Oh wait, we would not save and rent as it does not make as much money long term and is more expensive still...so the system, although expensive, favours those who can get onto the property ladder and even more so if you choose to move up that ladder...

Yes it is a practical necessity, but it is also a good long term wealth improver compared to other options.

What happens here is that if you are a pensioner you can defer the payment basically till you die and the house is sold OR the people who inherit pay the backlog of the payment so person dies, years of local property tax taken first then anyone who benefits from inheritance pays inheritances taxes plus whomever buys it pays stamp duty and all other taxes involved with purchasing a house.