...to propose some really radical changes to council tax?

[allswellthatends]

Following up on yesterday’s thread about encouraging downsizing (thank you, PoinsettiaPosturing) I’d like to propose a few radical changes to council tax, which we all seem to agree needs reform.

I’d base council tax on the total floor area of the house, ie all the rooms not just the footprint on the land. It would include garages, sheds, and even (perhaps at a different rate) private gardens. It would not be based on number of rooms but on absolute size, so there would be no cliff-edges, just a straight charge per square metre. (With, obviously, variation for land actively under farm cultivation or grazing.)

This would effectively make council tax a milder form of wealth tax or property tax such as they have in North America, but ensure the money stays local instead of ending in central government hands.

It would encourage anyone living in a home larger than needed to downsize (why pick on the elderly?) Living close together not only costs less in services but is better for the environment. It would help meet the government goal or reducing car travel in a fairer way than Oxford's plan to charge for driving out of your 15-minute neighbourhood. It would eliminate the need to target council house tenants with the extra-bedroom charge.

Taxing by living space instead of cost would be a great deal fairer to all regions: people who live in London already pay a disproportionate price for less space, why should they have to pay higher council tax on top of that? After all, more room is a luxury no matter where in the country you live. City residents would still be paying slightly more tax on living space, because city houses involve more corridors and staircases and I'm afraid I'm still taxing that when I become Queen of the World.

Please don’t all start screaming about how much richer Londoners are: they’re not all rich, and this is one reason teachers, nurses, and other essential workers are being priced out – cost-of-living adjustments don’t reflect true costs and could more efficiently rolled into a council tax system. London salaries are not as much higher than in the rest of the country as rents and property prices are; Londoners just pay more of their already-taxed income on housing, and subsidise services for the rest of the country in the process, so why should they be penalised yet again with higher council taxes as well? Like all of us, they already pay more income tax if they earn more and more VAT and stamp duty if they buy more.

But rural and suburban residents too might benefit from more council tax being collected locally to fund the services they use. In Britain people choose to move out because they want bigger houses, and then wail that there are (say) no buses, when the simple fact is that rural residents can't and don’t want to pay the true cost of running buses (and roads, plumbing pipes, and electric wires, and rubbish collection, and wifi signals, etc etc) over areas that are more spread out.

Then (here’s where I’d get really evil): I’d base the council tax on planning permission for the site, even before the building is built. That would give developers a real push to build houses. Westminster has been saying for years they need to stop developers from land-banking to keep housing prices high.

I’ve donned my aluminium-foil helmet.

We’re already taxed to the max.

I have three rules in life.

Never vote for more politicians
Never vote for more taxes
Never vote for changes to the above because it inevitably means more.

Bard, we already pay council tax. I'm just suggesting a change to how it's charged.

For the avoidance of any doubt, as World Queen I intend to set the rules about how it's charged but let each council set its rate per square metre. So local people can vote for (and live within) the council whose tax rate and services offers they like.

I think there should a land value tax - i.e the amount of land owned.

Under your scheme, what happens if people extend or demolish parts of their house. How is that checked and added to the bill, especially if done as permitted development?

Hmm, good point, greenbackers. North American governments seem to manage it for their property tax schemes (I guess through their planning boards?), but arguably we might find the cost of monitoring would take too much of the council taxes we collect? Coz like everyone else, I don't necessarily want to hike taxes, just make them more efficient.

Your London argument falls down if you want to keep this as a local tax.

London council taxes pay for London services.

It's still the same amount of revenue needs to be raised by the council divided by the local residents calculated a slightly different way. So some London residents will pay more and some less.

Also just to note people in Scotland have higher income tax rates than those in London

I actually wonder if this would add bureaucracy, not remove it. You'd have to have some kind of central government oversight to ensure councils operate their taxation schemes fairly, proportionately to local services and within certain boundaries, which would end up with each council having to pitch or propose rates to government on a periodical basis. The administration of that would be enormous.

Of course, one issue with doing it as a land tax is this: sure, you could split the total among flat-owners in proportion to their share of the apartment building, but what about people who live in properties you're not allowed to knock down? I mean most of central London seems to be designated or protected one way or another, and it wouldn't be too helpful if suddenly no one wanted to live in all those five-story Georgian and Victorian houses.

In principle it doesn’t sound too bad but would it also encourage builders to squeeze as many small homes into one space and conversely this is usually what the council planners don’t want (even though they want as many multiples of council tax as they can) there wouldn’t be the school/GP places for the multiple households)?

Also just to note people in Scotland have higher income tax rates than those in London

Yes this is true. I pay more living in Edinburgh than I did in any of the London boroughs I lived in previously. (Same goes for when I lived in Cambridge and Brighton, now I come to think of it.)

Obviously our (Scotland) council tax rates include water, which England's (usually) don't.

It would encourage anyone living in a home larger than needed

Define need. And who will get to decide this under your system?

Council tax is flawed as different areas have different wealth and so the rich areas stay rich which is already a problem ( although some of the wealthy areas also struggle with insufficient council funds . Probably because they tend to be conservative and so likely to keep rates as low as possible )

We are not taxed to the max however and richer people paying more makes sense

Same town same sq foot . One house 100000 another 1.5 million.....

Sorry, MajorCarol, but I'm not going up against Nicola Sturgeon. My helmet is only aluminium foil, after all.

MrsDanvers, you decide what you need, of course. And what you can afford. If you prefer to pay more council tax rather than hire a hotel room when family visit, that's your choice. If you love gardening, or just sitting in the sunshine, again, your choice -- which you'll choose to pay for. Or not. Similarly, elderly people and council house tenants can have as many rooms as they choose to pay for. I'm Queen of the World in this scenario but not a Tyrant, yet.

I am also interested in who decides ‘need’

i live in a home larger than ‘needed’ by most peoples’ reckoning. What they don’t take into account is that I ‘need’ extra space for the dc and their disabilities (I am fully aware that many - if not most - families in a similar position ‘manage’ without this extra space).

i have similar worries about the harebrained schemes being proposed about 15 minutes radius areas - 2 of m dc are at school placements out of county, as those are the closest schools that meet their needs. One is 30 minutes away, the other 40 minutes away. I cannot change my school runs, as they cannot be educated closer to home (and I can’t move closer to either school as they are in opposite directions from my house, plus issues with EHCP being issued by a different authority etc).

these theories are all well and good, but they don’t actually fit the reality of many peoples lives.

Like most people (I think), I cannot see a fair solution to gain taxation at the local level. Most fair solutions involve taxing for local services on a per-head basis - which sounds too much like the hated poll tax.

all I know is that council tax is currently one of our biggest outgoings and we seem to get nothing in return for it.

@greenbackers i would assume that when applying for planning permission that the change would happen at this stage.

The OPs suggestion about it including garages and permanent structures makes sense, but garden sheds would be much more problematic and harder to enforce.

Although I think it does make sense for your tax band to be more based on the size of property, I do think that value still needs to come into it at some stage. I don’t think it’s fair that someone in a flat in a deprived area with fewer (and likely poorer) facilities should have to pay the same council tax as someone in a flat of a similar size in a town centre with great services and facilities, which may be worth 5 or 6 times worth a similar sized property in the deprived area.

Its the sheer randomness of the current system that annoys me. I live in a 3 bed semi detached house in an ok area, my mum lives in a huge 5 bedroom farm house in rural area and is in the same band as me. Obviously the land included in the property skews the value, but if the land weren’t included her property is still easily worth double mine.

And then I have my grand mother who lives in a 3 bed new build semi detached, in area similar to mine. She paid 50k more than me for her house, but it must be about half the size as the rooms are tiny. Yet she a band higher than me.

it must look insane to people moving to this country, it makes no sense at all!

Doing it on land size would mean some million pound houses would pay less than say a cheaper house in a cheaper area that wouldn’t actually make sense to me.

The houses down my street all built maybe 80ish years ago were all built and designed for long term family homes with land to also grow some of your own food/keep chickens kind of housing not hugely huge but enough to enjoy a garden and provide for the householders. Built with proper pantry’s and the rooms of the house facing certain sides to make the most of the sun or colder parts like the panty. Stuff that actually I’d say we want more building.

"which we all seem to agree needs reform"?

Nice try.

OP you are basing your changes on a misunderstanding of council tax. In London many people with very valuable houses pay way less than people with cheaper houses elsewhere - so your argument that your new system will be "fairer" doesn't stack up.

Other than that your plans sound like a cross between the window tax (look how that ended) and a draconian rule to empty the countryside and force everyone to live in overcrowded shit cities.

No thanks.

It would eliminate the need to target council house tenants with the extra-bedroom charge.

Theres no charge. You just can’t get Universal Credit for any bedrooms above the minimum needed ie a couple need one not two. Your rent and council tax charges are the same regardless of whether you pay yourself or it’s covered by benefits.

Elf, I take your point. I too have (one) disabled child and when he was in a school halfway across London it infuriated me that I have to pay the Congestion Charge to drive him there. (Well, I guess some good came of it in the long run because I ended up organising a bus service for him and some of his classmates in the same position, which is still operating now that he's moved on. But I'm well aware that some people have more than one disabled child, as well as other children, elderly parents, demanding jobs...)

Askin, that's the sort of unfairness that got me thinking, too. We ourselves upsized from a three-bedroom flat for 5 of us, one of the bedrooms too small even for a bed, to a five-bedroom house around the corner, partly because of my disabled son and how he affected the other children. We are in the same council tax band under the same council, and even though we benefit from this stupidity it's still stupidity!

If you prefer to pay more council tax rather than hire a hotel room when family visit, that's your choice

I have a one bedroom flat, I have to do that anyway. As far as I can see this comes down to - you have lots of money, great. You can pay for the rooms and have the family round and parties and a garden and a swimming pool or whatever. You don't have the money - tough shit. Studio with shared bath along the corridor for you and forget the family get togethers. And that's not going to be just the elderly, although at bottom this is probably just another 'pensioners in houses too big for them, how dare they take up space' argument.

I've seen some daft ideas on here but that's a doozy.

But there's people in small expensive houses in the south east and cities and people in big houses in rural areas.
What about people that already live in houses that they have budgeted for on the current system but couldn't afford under this system?
I don't think it's fair to go on space rather than value.

Read that and thought, 'Oh we do?'