...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.

It works where my family live. I don’t see rubbish strewn along the streets and they don’t have door to door waste collections.
Fly tipping exists now in the UK.
Its about pride and respect. Sone people have it others don’t. Sone people are scruffy even with all the help in the world.

0.5% of the zoopla value of the house every year. No system is perfect but this is better than any other I have heard of.

Local councils are just as likely as Government to be corrupt and have proven themselves to be more than capable of spaffing tax monies up the wall, so I'd prefer to hand as little money over to them as possible.

I've no objection to that. But I've also not seen too many people arguing this kind of logic actually sweeping the streets, picking litter, caring for the elderly, educating kids ...

There should only be two taxes that apply to all individuals, income tax and wealth tax. Scrap VAT, council tax, death tax and NI. Instead levy an income tax that scales up aggressively as people pass the average earnings point and a wealth tax that targets savings, pensions (especially defined benefit schemes) and investments.

One of the most unfair things about the current system is that my income gets taxed, then I am charged VAT on things that are not luxuries, my taxed income has to pay my council tax and when I die anything I own will be taxed once again.

Surely it also depends on what the local housing stock looks like? There's only so much you can control of how big your property is.

I currently live in an area that is full of older big properties so they are mostly converted into flats which would work for single people in your scheme.

However I used to live somewhere where flats were rare, and the available housing in the area was predominately 50s semis which werent big enough to create maisonettes out but would be expensive if taxed per sq ft. There simply weren't smaller housing alternatives available eg you wouldn't be finding many properties that only had one single bedroom, most properties will have a double bedroom if you need it or not

I also hate the idea that it consigns single people to the ideas of things like studios.
There is a certain amount of basic sq ft that in order to have a basic quality of life.
For example if my partner moved out, I'd still need the same size kitchen and bathroom, same size living area, preferably with some space for a table to eat at. The storage needed for food, spare bedding, hoovers, gardening supplies wouldn't change.

Having been someone that's lived in studio flats and new build "starter housing", I don't think encouraging creating lots of small housing is right. I can't explain to you how shit it is to have small amounts of space. I've lived in places which have one cupboard to store all your food in (meaning you spend more as you can't buy anything in quantity), limited food prep space then limited space to cook it let alone then have a table to eat it at. It made getting proper nutrition really hard because it was geared's towards people maybe cooking a microwave meal or a pot noodle.

The starter home I lived in was 2 bedroom but had been built in a tiny foot print. As a two bed house you would assume it was a family home, and without dimensions or scale it really looked like it. However the house was designed with zero storage. No loft, and not a single cupboard, nook or cranny. A really good example of this was our hoover. The space design meant there was nowhere in the halls to leave them (too narrow), no cupboard, no under the stairs space (formed the key part of the living room) and had to live in our spare room. Our bedroom had an ensuite but wasn't wide enough to fit a double bed and any form of wardrobe in so we had one chest of drawers. The loft space was very limited height so more eves. The kitchen had 3 single cupboards total and an under sink cupboard. It was 100% designed for you to have to use the 2nd room as storage.

People who haven't lived in the basic new build layout really struggle to grasp just how unsuitable that layout is, how few straight walls you have for furniture etc. If you live in an older property then there's often so much more potential built in. I remember my parents laughing at the fact our spare room had so much in, until we pointed out that it contained everything they had in a loft, garage, airing cupboard, multiple kitchen cupboards, wardrobes, under stairs cupboards and any other cupboard they had

We need to be creating appropriate new housing that's both affordable but also practical and works longer term for people. For the love of God it needs to include cupboard space!

Is it really comparable though? No expert but I thought in the US income taxes and national taxes were much lower and state/ local taxes are higher because much more is devolved, with it being a federation?

No offence but that's a really bad idea and betrays a huge lack of understanding of economics and demographics.

@PuzzleMonster

It varies a lot by state but as much as Americans like to think they pay less, once you factor in all the extras levied on top it isn't any less really, sometimes it's more for often terrible services and schools.

My point was property taxes weren't comparable, are very expensive, unequal and not something most people would realistically want to see over here.

That’s why you have bodies like the Audit Commission to keep a check on things.

Not giving them money means you have less services.

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.

Yes, the randomness is annoying. I never understood why our first house was in band B and my parents house in band A. We couldn't afford to buy where I grew up, houses there were over £150,000. Their house is double fronted with a (small) front garden, three bedrooms, has a separate dining room. The house we bought was technically three bedroom, but only had one reception room downstairs and a downstairs bathroom, and no front garden, in an area that was generally cheaper.

Zoopla is horrendously unreliable - they had valued our old house at £90,000, which was hugely overpriced. No idea how they work out their prices, but I wouldn't trust them.

The easiest way would be to let home owners value their own property. Then have two taxes - one council tax based on value of property, and another capital gains tax that applies to any proceeds in excess of the owner-assessed value. If you make the CGT liability slightly higher than the council tax one, no-one would have any incentive to under-value their home, although if they really wanted to/needed to they could.

Who are you proposing it to? You understand this is a chat forum and we aren’t in a position to change it. So if you want to propose a change it’s to parliament or your mp?

Like I said you can never have a fair system. Or rather there will never be a fair system.
BRinging back the poll tax would be political suicide. I’m old enough to vaguely remember the rioting it caused up and down the country. The poll tax was unfair to all but an elite few. It resulted in everyone paying it regardless of ability to pay. This included pensioners on state pension and young adults who still lived at home with their parents. Everyone paid the same regardless of where you lived. I imagine stay at home parents paid the same too and I doubt the disabled got a free pass. Again, it caused mass rioting which I imagine cost millions of pounds. Riot police had to be paid plus the firefighters were having to deal with the burning cities.

Cmon you must be able to see how that is the worst idea. How councils in London would make way more money than those say in the north of England. How Zoopla is completely inaccurate for many properties?

no one could think council tax should be based on Zoopla surely?

Mind blowingly difficult for a council to keep up to date records on every building in their area. How much of the tax would they need to spend to monitor it? Too much. Taxation needs to be based on simple and clear parameters and not cost too much to be administered.

Yeah, really tricky.

I mean, it's at least as hard as creating and maintaining an open source database containing high resolution photographs taken every 5 meters for every single street in the country, and made available to everyone in the world free of charge.

Couldn't possibly be done.

Funding for councils in England has fallen by at least a quarter since 2017 and the demands on their funding like social care due to an ageing population has increased by as much over the same period of time. But if you believe they are as well resourced as google (global profits 257b dollars) go ahead with your dreaming. I shall tell my local council to just get on with building all that social housing and delivering domiciliary care and stop sitting on their billions.

That last comment is a bit silly. It's unlikely the councils would do it themselves and the comment was making the point that there is AI and technology available to do it and make it available open source like open maps or real time trains.

The expensive part is the part where the data is collected not the analysis on the data

Google did that once - they haven't been here since the estate was built many years ago

There is the ability technologically to do many things that aren't done, but even if the basis is open source the costs of developing the needed applications would be immense. Then every time rules/laws change, there would be another round of costs - sometimes something that seems like a simple tweak can in fact impact across an entire system.

Then you have the additional ongoing cost of staff to put in every little update & change to every property. These staff need training, and retraining when there's a system change. And support. And running costs of servers etc for something that wouldn't be a small or rarely used application.

As I said up thread - sometimes things that seem simple & obvious turn out to be VERY complex & expensive once you look at them in depth, which is often why they haven't been done already.

That's fine, huge numbers (maybe even most) large London houses have been split into flats at some point.

Haven't read the full thread yet, so I expect I am late to the party. In fact, many London boroughs council tax rates are far lower than the same band in the NE. Westminster has the lowest council tax of all, or it used to. Considering the wealth disparity, that seems harsh on the NE.