Council Tax bands

[titbumwillypoo]

Council tax bands were set in 1991 and do not reflect the wealth distribution of the country today it's about time they were updated. It's ridiculous that a band D home in Islington where the average house price is £685000 is £1276.48 a year when a Band D house in Barnsley average price of £166000 is £2126.77.
Government should update the banding values, collect all the money and distribute it based on the actual demographics of the area which would be a fairer funding model. Some areas might be child heavy or pensioner heavy and it would allow councils to fulfil their statutory duties better if they had the funding in place.
Band A £0-£100000
Band B £100001-£200000
Band C £200001-£300000
Band D £300001-£400000
Band E £400001-£500000
Band F £500001-£600000
Band G £600001-£700000
Band H £700001 upwards

It would be fairer, even if not popular. More people cost more money.

Good luck with that! Look at the outrage re means testing winter fuel payments!

Obviously it’s ridiculous that my parents pay less CT than I do despite my home not costing 2m but 🤷🏻‍♀️

I live in a HA house, they chose it for me, I have no say in where/ which house I live in and it has nothing to do with my income.

Buildings are easier to tax. You know where they are, and they stay there.

And no, it wouldn't be fairer, because poor people would be paying the same as rich people.

The Poll Tax was so unpopular, it brought down a government.

No need for bands. Just do it as a % of house value.

• Abolish stamp duty (this is a ridiculous tax that stops people moving)
• Abolish council tax.

• 0.5% up to 1m
• 0.8% above 1m

Houses valued when they sell or based on comps then move with the market. People can request valuations if they think they are unfair.

Anyone who bought in the last 3 years gets a tapering credit from the stamp duty they paid.

If someone cannot pay the tax but they have equity in their home, they can pay the tax with equity upon death or sale (with interest). There is a similar scheme for people who cannot pay care fees where councils pay and they get paid back later.

What about renters? Clearly you think everyone owns!

How would your last paragraph work with people who rent?

This doesn't work because house prices are not even distributed.

Owners pay.

This is how it’s done in pretty much every OECD country except the UK. It gets passed on in rent typically.

Why does this matter? That’s actually a feature of the design. A 20m house should pay significantly more than a 1m one…

It is hard enough to rent nowadays (too many tenants and not enough properties) without potential renters having to worry about the actual value of the place too.

It means that some London councils packed with valuable houses would have insanely high tax takes, poor councils would get hardly anything.

A wealth tax on all housing it not related to council tax in any way.

Why should someone with a more expensive house pay more for the same services though? We don't charge anything else like groceries or cost per energy unit based on perceived assets or income.
It should be a set amount for everyone, with the same council tax support currently given to low income households.

A thing that shocked me was that our council tax was reassessed when we moved in because the house had been extended. I didn't realize council tax didn't increase immediately if you extended, until the new owners moved in.
Our house was a band E while on the market which I thought was fair. But when we bought it we'd been here a month, found massive renovations necessary (££££) then a letter from the council telling us we were now band G and had to pay loads more 😭
It's taken me a while to like my house...

It’s a way better system than council tax. Renters wouldn’t have to worry about the cost of the house, the rent would be set as it is now and landlords take on the risk as any speculative investor does. The landlord is responsible for paying tax.

Why should £20m penthouses in central London pay less tax than 2 bed semis in Wolverhampton? If the country wants to tax wealth, this is the easiest way to do it. You cannot hide your house.

The vast majority of people would actually pay less under this system and the London housing market is totally insane, it could do with a correction…. The average salary in London is 44k but the average house price last year was 708k.

That makes no sense. What about the little deal you have if owners can't afford it? I rent from a HA, they aren't just going to pay it for me.

And it would just give private landlords even more incentive to raise rents higher and rip renters off (whilst taking a break from the CT with the cool little idea you have).

My situation is odd, and I am not sure how this would work with people like me. I neither own or rent... I live in a friend's house. I pay no rent, and they paid off their mortgage years ago. I know of a few other people in similar situations (family has bought them a flat to live in etc).

So no rent to add the tax on to, and an unfair burden for the owner when they are not living in the property or getting rent money from it.

@Tulip8 This is literally how pretty much every other OECD country does it.

I don’t know enough about the systems to know what happens for social housing - but I’m open to suggestions…

If someone cannot pay council tax what happens now? There’s more than 6bn in council tax arrears atm, it should be collected like any other debt.

@XenoBitch In that situation the owners would need to pay and hopefully you would contribute… have you done the maths, how different would it be to council tax? A 500k house would pay £2,500 a year.

@Rhayader seems not to realise that only 5 % of houses sell in any year
and many homes have not changed hands in over 100 years

Those who think a "Poll Tax" system would work need to read more history.

Its very simple
Every Council area needs a tax base on which to levy taxes.
Property are the ideal - they are physical, traceable and limited

Each council then sets a total charge level to meet its needs, spread across the properties
the legal term (since 1894) is precept

But then some councils like mine with high population density & high house prices would be insanely rich & other places wouldn't be able to fund basic services?

This

I'd be a bit happier if the cost of each band was the same in all council areas.

I only pay 20% towards CT as I am on UC.
And that is another thing... how would your suggested scheme work with people who do not pay (some people are exempt from paying CT), or pay a reduced rate? The cost can not be passed on to them via their rent in that case.

Our house is a five-bed terraced townhouse in the SE, but has tiny downstairs so really two of the 'bedrooms' are just extra living space. Only worth around £350k, which is much cheaper than 3 or 4-bed homes with a more traditional layout. There's no scope for really adding value either, so house price hasn't gone up a huge amount.

Yet, we're also band E! It's ridiculous... Our house wasn't even built in 1991 so there's no way they can calculate our band fairly.

I did briefly look into challenging it, but I think you have to demonstrate that similar houses are at a different band. Which is all well and good, except that there's not many like ours, and I'm pretty sure they're all E as well!

I thought the proposal of everyone paying 0.49%ish of their current house value was quite sensible. Selfishly, it would pretty much cut our CT bill in half!

Some interesting points. The reason I went with house prices is because some areas have seen disproportionately massive rises in values since 1991 it's priced out normal people who do the essential jobs, whilst the demands for those people is still there. If say you have a village full of million pound houses full of pensioners, the people who look after them won't be able to live near by and will likely live in low value homes so the costs to the council are increased whilst not having any way of recouping that money with the current funding model.