To think an annual property tax is incredibly unfair?

0.48% to replace council tax and stamp duty would be a bargain for me! We current pay double that for council tax.

Even at top end it doesn’t sound that high to me and really shows how different areas have such different council tax. I know my friend in their 4 bed £1.5m London house currently pays less council tax than I do in my 2 bed northern house.

Over the last 20 years, average UK house prices have increased by 74%, climbing from roughly £113,900 to around £268,200

It’s very standard in a lot of countries.

most tax is unfair in one way or another.

The reason why people stretch themselves is because sure the housing ladder doesn’t exist anymore and moving is so expensive. It’s often the best plan to move into a family house once than it is to buy a flat, move to a terraced doer-upper , move to a semi, move to a detached. You may as well just stay with your parents and hoard as much money as you can and get the detached as your first home.

No. Its not a fair concept.

Fair would be based on area of house rather than value.

Our house is worth about £700k (4 bed detached) so this would be cheaper for us than the current council tax.

Sounds like it may be based on US ones? My colleague used to pay $12K a year, she lived in a 3-bed semi in Milwaukee, which is not that expensive I don’t think. We are lucky with our council tax, it’s very low. I guess US income taxes are lower though (but not when you include healthcare premiums.)

I have very little sympathy for those living in a large house with a fixed income. The answer is easy. Downsize. Pay less tax and no stamp duty due to the new tax removing stamp duty.

no it doesn't, but the system is already unfair. I live in a 2 bed bungalow, band C, and my parents live in a 3 bed semi, band A. They have far more living space than I do, and 2 bathrooms. They are rural, I am on the edge of a village. They get the same council services that I do apart from street lights. Both properties have the same financial value but they pay less than I do.

I do think it would be fair to pay a % of your property value. Those who own more will pay more. It should be a cost factored in when you buy a property.

People do choose where to live and there will always be those who can afford and those who can't. A lot of people do stretch themselves to buy the biggest thing they can get rather than buy what they can afford and live comfortably.

I had forgotten that I receive the single occupant discount, so working it out again, I would pay less than half of what I do now. No its not all about me, but it does seem like a much fairer system.

No it wouldn’t be particularly fair IMO. It’s also not fair that a household with 2 adults earning £60k each gets child benefit, whereas one with 1 adult earning £85k and the other nothing doesn’t. Many things in life aren’t fair.

It’s really going to depend on the detail. If this yearly tax will replace stamp duty AND council tax for everyone then what’s the plan with those with fixed incomes? What’s the plan with those people who currently enjoy the 25% reduction in council tax due to single person occupancy?

Putting in place a retrospective tax that is fair and popular is a very very hard thing to do. You might plunge someone into poverty who had previously been able to afford their bills.

But you need a certain level of income to get the higher mortgage and to service it, the larger the mortgage, the higher the income needs to be so while it may not be a wealth tax, it’s progressive in that those with higher income pay more.

Yes it's fair. At the end of the day (once you've paid off your mortgage) you will own the London house. And it will have appreciated in value because it's in a city, and then when you sell it to downsize and move to the country you will get more for it than you bought it for (not necessarily more than you ended up paying for btw)

I think you're whining cos you think it will adversely affect you and that's why you are arguing with everyone who posts an opinion different to yours.
Yes, it's your thread but you have asked a Q and MN is trying to answer you!

Yes I think it’s absolutely fair, if you can afford a more expensive house then you should pay more tax. If I can afford an expensive house but choose a cheaper one, my excess money is taxed in other ways such as interest on savings/investments and VAT on purchases, I don’t see why spending on a larger than average property should escape this. I’m also in favour of it removing stamp duty as it will boost the transition in the housing market and encourage more people to move or downsize, which IMO is a good thing.

ETA - we will pay more under this scheme and I still think it’s fair.

Agreed, OP.

We obviously need a general election to provide a mandate for such a sweeping overhaul.

Fairness is subjective not objective.

There are threads on here arguing that people who have made significant housing gains over the past few decades and underpaid (relatively) council tax for those decades by tens of thousands will be unfairly treated under taxes like this.

There are also people that argue that someone in a two million pound house in London that has appreciated significantly over the past decades paying less than half the council tax than someone owning a £300K house up north for the past 30 years is fair.

Council tax is highly regressive and unfair in my opinion and needs to be changed. The tax itself was instigated by the Tories, so that should pretty much tell you who it was designed to benefit - it benefits those at the top end whose houses are banded together with much lower value properties because of the low dynamic range/resolution in the banding system. People in the bottom bands pay far more in relation to their house value compared with people in the upper bands.

Multiple mechanisms have been proposed to mitigate the impact of the changes so no one will be forced out of their house unless they want to move.

If there is any unfairness in the system for me, it is because of stamp duty paid by people who have moved recently. But it is always the case that some people benefit and some don't from changes.

If we basically said we weren't going to do any changes because some very small minority of people might be disadvantaged then we would never change anything, and changing something that is so obviously wrong is a no brainer for me.

Of course multiple governments have shied away from doing anything about this. Even the noughties Labour governments who should really have done something to fix the inequality.

To get a big mortgage you have to have a high income. People make different choices about how to spend their money and how much to 'stretch' themselves with their mortgage but you can't by a very expensive house unless have a lot of money to buy it outright or a high income to support the mortgage payments.

One reason economists tend to like property taxes like this is that it incentivises people to downsize when they can, this improving the efficiency of the housing market.

North-east here…I’ll swap with you. You can retire to the countryside in a massive house by selling your London home. Someone in the northeast wanting to do that would have to find triple the value of their home (and some).

If you think it is so great living in the north east then come here. Your mortgage will be tiny but you’ll have limited job prospects, your children’s education will be worse, life expectancy will be lower.

Ridiculous to act like people in the North East have it better because they have a cheaper house whilst ignoring all of the other impacts. People up here work until they die, or retire with significant health problems, all of this information is readily available.

The thing I hate about any property or wealth tax, as opposed to a tax on income or transactions, is that it seems to imply that nothing you own is really yours, it's just what the government allows you to keep at any given moment, and it can be taken off you. I think it's quite sinister.

Any tax on private landlords is passed on to tenants in full in the form of higher rents. Many, many studies have proven this to be the case.

People think of council tax like that, but it's not a genuine reflection of that is going on.

FWIW the vast majority of local government spending goes on Adult and Child social care, not on services like emptying your bins.

People with more money get taxed more in a progressive tax system. If you have a more valuable home then you are more wealthy and so the government would like more of your money. The tricky thing, from a policy and messaging perspective is that we are not used to 'wealth taxes' in this country, which leads people to think they are 'unfair' when actually they are just unfamiliar.

We have lots of 'bad' taxes in our system (council tax being one of them, incidentally) but people rarely complain about them because we accept the status quo and any change leads to winners and losers so it's politically very difficult.