What would a land value tax look like instead of council tax?

[Newmeagain]

Just saw something about this in the news. Concerned about potential impact on home owners in London who may not necessarily be wealthy - ie no other assets to sell and not a huge income.

does anyone know?

Where I live, councils are largely funded by rates on property, and if you don't own property in the area, you don't pay anything equivalent.

A point to note is that although rates are set by reference to property valuation, the council has the ability to set what percentage will be used to calculate the rate and this can vary from one neighbourhood to another. So it isn't the case that people lining in high priced houses at one end of the country will pay massively more than people in low priced houses in another. Ultimately it'll be dictated by the revenue the council needs.

It doesn't have any obvious effect on house prices either.

It's a very simple, workable system. Typical for the UK to overcomplicate something like this.

Almost no schools
Almost no social housing
No rural buses
No long bin lorry routes
Mostly Band H houses suppress the Band D
Much of the ceremonial and community identity stuff is done by the national government
Parks are Royal parks not council
Few play areas
No allotments
Very few OAP flats needing Adult Social Care
No Special Schools

Just the usual

You’d be doubly screwed @Newmeagain, London has some of the lowest council tax rates in the country! It would be a start if they re looked at the bandings like they were supposed to every 10 years but have never changed them. Anyone buying a property built post the initial valuations gets unfairly treated. It’s a very un balanced system.

Ah, thanks @Talkinpeace , that makes sense

Westminster also gets enormous amounts of central government grants in addition to the huge business rates they raise.

None of this seems that hard, if you keep in mind there's an asset to enforce against.

It seems to me that you assess land held in trust by assessing the trustees.

Regarding land in the West End: you would assess the freeholder, ie, his grace, the Duke of Westminster.

Land 'held' by struck-off companies could be dealt with by a bit of legal fiction, ie, the council assesses the company: if it's not restored and the council isn't paid can sell the land at auction and anyone who thinks they're entitled to some proceeds of sale, can apply for it.

That leaves land whose ownership is uncertain and while that may come up commonly in your line of work, whether it's really an issue would depend on the level of rights granted to council to assess on the basis of what they know, and sell property auction.

Quite easy actually.

Sorry, that was a reply to @Talkinpeace

I have been working so have just come back to this!

Someone mentioned potentially paying 1%. My house in London is tiny and basic and most of its value would be the tiny plot of land. Say it was worth £700k - that would be £7000 per year. I could just about find that right now but certainly not in a few years. Many of the older people on my street would not either - and we are not living in mansions. These are tiny terrace houses.

I am really worried about this.

I really wouldn't worry yet about what someone on a parenting chat site says about the beginnings of discussions over potential changes to tax way in the future.

Also you probably purchased at an earlier time and wages haven’t kept up with property rises.

@TomPinch indeed. It might even have the rather nice side benefit of bringing public scrutiny to bear on who actually owns England.

The link I posted was to a random house in New Hampshire to show that land taxes are factored in when buying houses.

$7000 is NOT a representative figure for if such a system was brought into the UK for crying out loud

Remember a lot of very rich people have land in trust so the title doesn't change. And if it hasn't changed since it was mandatory in 1990, it's Lost Acres.

Lost Acres
These acres, always again lost
By every new ordnance-survey
And searched for at exhausting cost
Of time and thought, are still away.
They have their paper-substitute –
Intercalation of an inch
At the so-many-thousandth foot:
And no one parish feels the pinch.
But lost they are, despite all care,
And perhaps likely to be bound
Together in a piece somewhere,
A plot of undiscovered ground.
Invisible, they have the spite
To swerve the tautest measuring-chain
And the exact theodolite
Perched every side of them in vain.
Yet, be assured, we have no need
To plot these acres of the mind
With prehistoric fern and reed
And monsters such as heroes find.
Maybe they have their flowers, their birds,
Their trees behind the phantom fence,
But of a substance without words:
To walk there would be loss of sense.

@Talkinpeace I wouldn’t be so sure, it all depends on the city and state, many property taxes rates are higher than 1% unfortunately. It’s a big annual expense for many people.

@BruFord
Every state is different.
I am well aware.
I picked a town I know well to grab a random house.
People are reading much too much too much into it.

even at the higher levels (£2m+ has been mooted) it wont happen. How does anyone know whether a house is worth £1.99m or £2.1m without it being valued. There are not enough surveyors for all properties potentially falling into that bracket to suddenly be valued and how do you enforce access to the property for valuation purposes etc.

SDLT gives the latest value for every street
extrapolate to all intermediate properties

the whole country could be mapped to current values in an hour

Sure, they could just carry on as they are now by Making Shit Up. Eg every dwelling built after 1998 has a notional value assigned to it. And people are taxed on that basis. Ie the state demands money from them, on pain of prosecution no less, based on a notion.

I can feel the trembling of the property owning classes, quivering at the very thought.

Alack, oh no. Whither Islington??

It couldn't though. Sure it might be possible to do it roughly for a new housing estate where there has been a recent sale in say the past three years and where properties are all of type A B or C in design. But most streets in the UK aren't like that. My house for example shows on zoopla as last sold in 1999 for £300k. It was actually sold to us for more than double that in 2009 and we have spent a significant amount extending it etc. It's now worth much much more than just the average rise in house prices would show. Plus all of the houses on the road are very different and none of the houses can be seen from the street. They are all behind walls and gates.

I'm quids in the since if you look at the average house price for my road it is showing as £445k I don't think there's a single house on the road worth less than a million. It can't possibly work. Certainly not within the time labour has left in power.

Zoopla <> Land registry SDLT figures

HTH

I'm a lawyer thanks. The land registry records show the price paid for a property. This means that the land registry information is entirely dependent on houses having sold. Many large houses in particular won't have changed hands in a long time.

I know of houses in Eaton Terrace and Edith Gardens that have never ever changed hands (and likely never will) as the family trust owns them
BUT
One or two in a street set the value pattern for the whole road
from the algorithm point of view