...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.

By the way I live in a true blue Tory constituency in the south and pay considerably more council tax than people in London do, I'm not sure how we compare with eg Scotland or cities in the north of England. I paid buttons when I lived in Wandsworth in a tiny flat which was band A.

Rubbish idea unless you're going to make sure everyone has access to live in a tiny shoebox house with no garden. The size of the property does not equal its value.

Yabu. If you're a Londoner you already pay less than the rest of us for an asset that is worth significantly more than a comparable asset elsewhere. We're already subsidising you!

It should be based on a combination of income and asset value and the single person discount should be 50%. There should also be a discount for tenants. They get taxed based on the 1991/notional value of an asset they don't even own! Instead add a tax on landlords and also freeholders. Which also might discourage developers from building leasehold bloody houses.

I think that's a good idea, bit similar to property tax in France & other places I believe.

Another good point, Kinnorafron, but actually, it was your choice. You wanted more space, so you moved further out. Definitely your right to choose. Sounds like, though, you could have chosen to live in a smaller place and didn't... your choice.

Am sort of surprised no one has yet pointed out, more specifically, that many people live where they do because family is near or they grew up there. I am so rootless this is a lost cause with me but I do get that it matters, especially for money-poor or time-poor people. With enough political pressure arguably each region will get a mix of more "Tory-style" (low-tax, low-service) and "Labour" (less-tax, less-service) councils but that too will take at least a lifetime, so this is a problem.

You are all raising very interesting points. Honestly, I want you all to join my Star Chamber. Shall we form a political party?

Abolish CT & SD & just have the one property tax.

We've just been through a pandemic that spread rapidly because people were packed close together, and now you want to impose a tax that encourages people to be packed closer together. That's bright !

I have a half acre veggie patch & greenhouse. I live rurally. I grow 50% of our veg, fruit & salad - all environmentally sound, no food miles etc but you think that should be taxed now. I assume you live in a town !

Sounds like forcing older people who don't have large amounts of cash out of their homes.

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'm not sure about that because I don't want green field development. But maybe we need to be stricter about council tax on empty properties which need to be brought into use. And obviously charge second/third/tenth home owners a massive premium. But with my grant from central government idea you wouldn't be able to do that, unless councils levied an extra charge on those people.

Well the op of the referenced post was exactly trying to achieve that

I pay more than that in an old mining town in the north east! 2.3k for a village is cheap.

OP why does it need to be based on house size? Not number of people accessing the services? We don't use even half of the services our council provides (road isn't even adopted) yet pay the same as someone with three kids in the local school, using the leisure centre and library. We also live in an area where we don't need to downsize as we aren't packed in like sardines. You chose to live in London with its benefits like easy access to promotion and shopping but that does come at a cost. We live semi rurally, have to drive to the local shops etc but have the advantage of more space.

Guy across the road has a large pigeon loft and a treehouse. He's going to get totally hammered. Bloody birds won't pay a penny, either, the feckless sods.

And we have a winner.

No thanks to the idea. We already pay over £300 for sod all services. We live in a small village so do have space and a decent size garden. No one could develop the garden for housing due to access so we couldn't reduce the space if we wanted to. Our friends who live in Greater London pay far less and get so much more. Under your plans we would need to spend even more and still get hardly anything for it. That's not fair either

I lived in a 2 bedroom council house with a huge garden.
Single parent (always worked).
That would have made me pay more because I was allocated a house with a big garden. Not fair.
Maybe it should go on people ? It's to pay for services.

How would work for people with leasehold (rather than freehold) if it was based on land owned? Where I live is mostly leasehold.

@LeggyLinda

no police?

no rubbish/recycling services?

no road lighting?

no road maintenance?

ne verge cutting?

etc etc etc

mist unusual??

Fuck this I own a bungalow

Erm no thank you. I am a private tenant & have a HUGE garden shared between 2 flats- but 'my section' is the biggest according to the title deeds. I only live here because no other landlord would take me as I'm a single mother relying on UC to help pay rent. I know they say they can't discriminate but they absolutely do. Why should I pay more council tax than my neighbour who owns her house outright? Ridiculous idea.

@allswellthatends @Kinnorafron it's not always a choice where you live though ?
People on MN are always getting told to move to cheaper areas.
There are people who would love to live in London but will never be able to afford to.

I think it's a great idea. We are, as some people like to point out, a small island. Anything that encourages efficient use of housing and space should be encouraged.

I guess I could say that every council has to tax not only on the same basis but at the same percentage, but, as you know, different areas do have different priorities and surely we think the choice is good too?

It's not just different priorities, but different needs e.g. an area with a higher percentage of low/no income people usually needs to pay more to support them. An area with a higher proportion of the elderly is likely to need to spend more on social services, whereas one with a young family demographic will need more spent on education. You then add in factors like the higher the population density in general, the more these and many other outgoings increase e.g. healthcare, infrastructure support (as being used more), facilities.

Then factor in areas where there just aren't many jobs, e.g. very rural areas or those where a traditional industry like mining or manufacturing have stopped. Feed in the additional costs of cities & towns where much of the wear & tear on infrastructure is caused by commuters or shoppers coming in to the area

And then add in the salaries of the people carrying out these functions; you tend to have to pay more for certain professions in built up areas due to a variety of reasons including availability of these people and their own cost of living, but in more rural areas you need to allow for longer distances to travel between jobs and possibly again fewer skilled workers in a particular field.

I'm afraid that like many good ideas, once you start to look at exceptions and differences you realise that what seemed simple is actually much more complex than first thought, and that there tend to be more exceptions than the "typical" example the theory was based on.

I've seen this many times over the years, in Central government, Local government, and in private businesses. Someone comes up with a bright idea, feasibility studies prove that it's actually NOT feasible. Then 10 years later some other person comes up with the SAME bright idea, and you go through it all again. Or even worse the in depth study doesn't take place, the idea is implemented, and it's a complete failure costing time, effort & sometimes worse.

May I applaud your excellent post.
Well played.

There are two aspects here. Council tax is a property tax with the aim of taxing people at least partly on their wealth rather than just income. In addition it is a local tax and, as has been repeatedly pointed out, people with very valuable properties in rich areas pay less council tax than people in bigger houses in poor areas.

My brother lives in a 2 bed flat with 1 reception room in London, I live with my husband and children in a 4 bed house with 3 reception rooms in the NE. We have similar household incomes, his flat is worth twice what our house is. Which house should be in the higher band? Who should pay the most council tax? Who is paying the most?

A local income tax would be one kind of fair but wouldn't reflect household wealth. And all politicians are reluctant to change the system because when the poll tax was introduced councils took the opportunity to increase the amount they collected (hence the riots). You can pretty much guarantee the same would happen again if the system was changed again.

We already pay over £300 for sod all services

Is that per month, per year or a typo?