...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.

Yes but why are all these properties in such a low band compared to elsewhere? A band d property would be about 300-350k round here. I presume it’s because Londoners have seen their property prices skyrocket and are vastly underpaying

This sounds like it could be incredibly unfare to single households. Would there be a kind of standing charge where each household got Xm square for £Y then were charged £Z/square meter?
Let's assume I live alone in a 1 bed property but the neighbours are a couple. I would then pay twice as much tax but be using less amenities. I cannot downsize. I can't have half a bathroom or half a kitchen.
So does a garden have a different rate to a kitchen.
I just think it would be so hard to bring in. Maybe if you bought your home before 2025 you could choose to stay on the current system but newbuilds and exchanges would be on new system.

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.

Council Tax is meant to pay for local services. It makes no logical sense for it to be linked to house value at all. The poll tax actually made the most sense. I was a small child then so not too clear on what people's objections to it were. There will never be a perfect system but surely the closest crude approximation you'll get to the amount of services used would be the number of occupants, not the property value or size or garden size!

And also, what on Earth have family get togethers got to do with funding the appropriate share of your use of local services?

Exactly.

But at the same time, why should the poorest people in the country be paying the same as billionaires? Surely a fairer system would be to rebamd all properties based on today's values and review every 10 years, pool all money back to the government then share out fairly to councils.

Shocking on MN I know but there’s always cycling when people take about a 15 minute radius. Electric scooters. Just use your imagination really, we don’t all have to live cheek by jowl in apartment blocks.

*talk

I don’t understand a radius based on time..as in a “15 min radius”
A radius is usually as the crow flies….as in a straight line..but we don’t journey in straight lines?
And what method of transport is this measured by?
Some days it takes 30mins to go 1/2mile, other days can get 20 miles in 15mins and that’s by car.
If it’s a bus, you can literally have not moved and inch in 15mins or more standing and waiting at the bus stop.
Walking..is that the speed of an angry teenager or a shuffling pensioner?

and so on. Seems pretty arbitrary to me.

The land tax in France was a complete disaster.

That is exactly what happened in France. And not just to old people, either.

Its about cost efficiencies. The miles of road per resident in Wandsworth is much lower than in South Wales. Makes it cheaper to sweep them for each person chipping in. And one bin lorry can collect a thousand residents' waste in a day, tip at the transfer station, and return to do another thousand before that crew go off shift. In Shropshire that same crew might collect the bins from a hundred homes in the entire shift. One big library can serve 100,000 residents in Westminster, in a rural area you'd need 10 smaller libraries each serving 10,000. That's more librarians, more heating, and ten copies of each book, whereas the bigger library might only need 5. The list is endless. Bottom line is, cramming people into cities is cheaper, rural areas are nicer, that attracts better off people, but it also means country-dwellers have to pay more per head for their services. It's not just public services though - you seen the petrol prices in Cornwall? Or tried to get a parcel delivered anywhere in Northern Ireland or the Outer Hebrides?

Oh dear.
there do seem to be protests in France, not that it gets reported.

I must go to bed but I will look up the situation in France, as we will probably get lumbered with something weird soon.

What about people who commute? They use the city benefits without paying for them surely? And vise versa obviously!

Id love to pick a house based on exact need - but that isn’t obtainable.

A large town house is now cheaper that a 2 bed flat because people can’t afford to Mai rain or heat them. They would go to ruin!

Because they get exactly the same service from the local authority regardless of their wealth or the size/value of their home. Council Tax is supposed to be about paying towards the local services and amenities, not a wealth tax. I'm not even sure why it's called a tax at all really? Other taxes (income tax etc) are supposed to raise more money on a wealth/income basis.

The whole tax system needs overhauling. But then so does public spending.

Band D properties in different areas are not remotely comparable: in one place it is a small flat, in another a large house, so you are comparing apples and pears.

So should everyone be subsidising those who don't pay their fair share, or shouldn't they? You seem to be arguing that everyone else should subsidise them, but not you!

They're based on valuations made in 1991. Some of the London boroughs are less than half the cost of other areas regardless of band. It's really not apples and pears at all.

The whole point is that people aren't expected to pay the same for the services a government or local authority provides because people don't have the same capacity to pay.

If you base the calculation for an individual's liability for taxation on X, then people with a lot of X will pay more tax than people with less of X. It doesn't matter what X is. Income, Transactions, Land Value ... there will always be people who have more of it that others, who will be required to contribute more than others owing to that imbalance. No method for choosing X is inherently fair or just - they each disadvantage different groups, that's all.

So the real challenge is ... what criterion for X is the most efficient and effective way of collecting tax? Not the fairest ... the one with the lowest costs of collection. That is why income and transactions have historically been prioritised ... because there is a cash transaction occurring at the point of taxation. That's why employers deduct PAYE and NI ... because they already have their wallets open each time they run the payroll. It's harder to avoid.

Taxing wealth, or land, is fraught with problems - the main one being that there is not necessarily any cash on hand to settle the tax bill when it falls due. But, there is a bigger social problem - becoming ever more acute in an increasingly unequal society - which is that all the wealth is concentrated in the hands of a much smaller segment, and those people are not using their wealth to generate anything productive for the economy (think of all those old folk in their empty-nest five bed houses that their kids moved out of 20 years ago ... and are now trying to raise their own families in 2-bed rentals ... )

Whether we like it or not, there aren't enough workers earning high enough wages to support government expenditure through income taxes, and there aren't enough high value transactions to support it through VAT, so a greater share is going to have to come from taxes on assets. More council tax, more inheritance tax, new wealth taxes and so on. Or the government stops spending quite so much ... but those cuts will have to be borne by the unproductive parts of society. It would make sense to start with the old - we could cut NHS waiting times by 80% if we enabled one-way visits like we do at the veterinarians.

Because it's a tax for local services that they use. This is why it's ridiculous that it's linked to the type of property. It should be a tax per resident of each local authority area.

Again, no it doesn't when you look at the type of property being taxed, not its resale value (which is irrelevant in terms of proportion of Council services used). But yes a better approximation for services used is number of occupants, not property size. But property size would make far more sense than property value. A Band D property in London (tiny flat) is not comparable to a Band D property in a rural area (huge house). The latter may have many occupants therefore use many services. The former can only house one or two people. Far easier administratively though and fairer to simply divide up the budget needed for local services by the number of local residents and charge that.

Yep.

Not sure if your ides would work but council tax does need to be changed. We used to live in a flat above a shop. We moved in to a far larger semi detached property with cellars: both are band A.

US/UK property and council tax payer here. My UK council tax just went up this year as my partner finished his course. Kind of them to give those discounts.

For my pokey house in the US in a northern (midwestern) city on 1/16 of an acre, the property tax was $5400 this year! My parents were over 6k before they went to the country side. And what people pay in the east like NJ would make your eyes water- think 8k. Snow plowing doesn't help those in the northern states either!

The US system also funds the schools which makes for massive systemic inequality.

So like most things, I wouldn't be recommending the US version, OP!

Id be happy not to have my bins emptied in return for a reduction in council tax. I would quite happily take all my rubbish to a collection point.

You haven't thought that through. Firstly, it wouldn't save much if anything. The council would still need to do daily collections and process the waste. Not everyone has a car, so there would need to be lots and lots of collection points, within walking distance of people's homes.

Also, it would make it significantly harder for the elderly or non able bodied to have their rubbish collected at all.

And it would lead to a totally predictable increase in fly tipping because some people couldn't be bothered.

It's a classic example of someone only thinking about what works for them. Councils aren't about providing the optimum level of service that you require, they are there to provide the services the whole community requires. And bin collection is high on the list.