Government announcing doubling council tax double for band G & H

[spookymelon666]

I know it’s not yet set in stone. We can’t afford it. There’s an assumption that these are high value houses. My house is worth no more than 300K 3 bedroom detached 125m2 with no front garden or driveway or garage and a tiny back garden and we are band G in Scotland. I’m so frustrated by the cost of living. We already can’t afford any holidays. AIBU that this isn’t fair?

What actually do people think should be taxed, and how?

Right so on a third of the average salary, you managed to buy a house that was close to averagely priced house in the UK after a mere three years of saving.

You are utterly clueless about the state of the housing market today if you think that is comparable to the challenge facing today’s young adults.

The discrepancy is down to the distribution of different size/type.value properties in different regions - you can't do a straight comparison of what a particular band has to pay in each authority.

All local authorities calculate the council tax bills in the same way - I can't remember the exact proportions but Band D is seen as the base unit, Bands A, B and C will be charged something like 0.7, 0.8 and 0.9 times the Band D amount, Bands E, F and G something like 1.1, 1.2 and 1.3 of the Band D rate.

So assuming each council needs to raise the same amount of money overall from the same number of households,if you live in a Band D house in a region mostly made up of low value houses that fall into bands A, B and C, you will end up paying more than someone who lives in a Band D house in a region where there are a lot more expensive houses that fall into the higher bands.

They need to be more fiscally prudent and stop spending. The hopefully dead-in-the-water Chagos deal, for instance, would have seen the UK giving anything from £3.4 billion to £47 billion to Mauritius, they've already bottled rationalising the welfare bill after the backbenchers blocked it, the asylum hotels are a few billion a year before you even get into the welfare costs once the claims are granted, etc etc.

That all makes sense - I think the issue that people are taking is the perception that anyone with a band G or H house is living in a mansion rolling in cash Scrooge McDuck style. Whereas in plenty of cases they're quite ordinary houses and lifestyles.

Its not fair on you because your house isnt worth megabucks. But I've no objection to a mansion tax.

At what threshold should the mansion tax kick in?

The problem with a mansion tax is that if you apply it to value you are going to have some small homes in the south falling foul despite not being mansions

would be better to apply to square footage

The problem with a mansion tax is that if you apply it to value you are going to have some small homes in the south falling foul despite not being mansions
would be better to apply to square footage

That's imperfect too though - the value of land varies massively depending on where you are in the country. You could have people on a perfectly ordinary income who extended for whatever reason (children, elderly parents) who now fall foul of that because they live somewhere cheap and rural.

Yes true. But calling it a mansion tax is emotive because i don’t consider a small 3 bed house a mansion!!

personally i would prefer councils to go back to basics and central government fund police/fire/social care/send

I would rather pay more income tax than council tax

I don't know what the answer to all this is.. I wish they could implement some sort of proper wealth tax. There are people out there who have millions, make millions through passive income, corporations which evade tax. It's shocking that the ultra rich get away with it while we are here worrying about the ability to pay housing, heating, food, bills etc..

• the largest component of the tax gap by tax type is the Corporation Tax gap at a 40% share, followed by the Income tax, National Insurance contributions and Capital Gains Tax gap with a 31% share and the VAT gap with a 19% share of the overall tax gap
• the tax gap from small businesses is the largest component of the tax gap by customer group at a 60% share in 2023 to 2024; the tax gap from wealthy makes up the lowest proportion of the tax gap at 5% in 2023 to 2024

www.gov.uk/government/statistics/measuring-tax-gaps/1-tax-gaps-summary

What they need to do is reduce the bloated and wasteful welfare system, we cannot afford it.

I'd rather pay more tax to a national government for NHS, benefits etc than pay to our local council who are even more crap than government. And their executives are better paid!

And put an end to the annual climate change tax on all of us.

If they do that there will be a revolution. At least it will unite us all.

If it happens (which it won't) it will be interesting to see what the Reform councils do 🤣

“move to a band E or F property if you can’t afford a band G one”

What an ignorant comment. Because paying the near £20k stamp duty to move to a band E house in our area (a part of Oldham that’s on the border of the peak district, but hardly Kensington) is easy is it?

The council tax bandings were a joke in 91. Every band (A-E) covered house prices in a 20-40k ‘window’. Then suddenly band G covers £160-£320k? Designed to benefit the tory voters in the shires. Ours was built in 98, and was valued at £165k in 1991 prices. So just in band G. Yet a house valued at £310k (now roughly £1.5m), pays exactly the same. And a house in band H , potentially a home valued at £100m, pays only a small % more than we pay… How is that progressive or fair?

We currently pay £4140 a year. We have a joint income of £120k. We’re definitely NOT rich. We saved for years before buying this house, we’ve sacrificed holidays, cars to buy our dream home. It’s not a mansion, it’s a fairly large (not huge) 4 bed detached in Oldham.

Doubling this would destroy us. The value of the house would plummet. Likely we’d lose £100k on the house and yet there would be no corresponding fall in value of the band E & F houses (likely the opposite because owners of the band H homes would all want a band E & F house. So selling ours becomes very difficult (almost impossible).

This is what gets missed, doubling band G houses catches fairly normal people. Not rich people. Where can we find an extra £4000 from? Would Oldham see that benefit? No, it’d go straight to central Government. So it doesn’t even contribute to improving our local services (which are dire already).

If this happens then my wife and I will seriously have to consider leaving Britain. We’ve seen so many tax rises over the past 10 years, this will be the final nail. I imagine many people will be in a similar boat. We’re lucky that my wife has an Irish passport, so we have an option. But people need to ask if this is really a sensible proposal?

Is it sensible to ask people on decent salaries, but definitely not wealthy, to suddenly demand an extra £4k per year from them?

So like old style rates? That didn’t work very well and was very unfair too.

The only fair solution to all this is a complete overhaul of property taxation. Literally EVERYONE knows this. Politicians, economists, business people… ALL agree. Yet governments do NOTHING!

A land value tax, based on the UNDEVELOPED cost of the land is the best solution. It doesn’t penalise investment, it claws back any increase in value where there’s been public investment (new road, new transport system, improved schools etc), and all those developers that buy land and refuse to build on it, just to stop someone else doing it, well they get taxed the same as those developers that do develop it. So it encourages land to be developed, not penalises it like the rates do ant present.
But they won’t do it because it’s hard to get off the ground. And means changing too many other taxes.

So even when everyone agrees the answer. Governments still won’t do it.

This country is . loo

Taxing property is not a better or fairer way. Especially when valuations are 35 years out of date. Like it or not, taxing income is the fairest way, because it’s based on what you actually earn. Not based on an asset that cannot generate an income.

Not forgetting the inherent unfairness of council tax. Council tax in Westminster is incredibly low because they have virtually no social care costs (no one needs it because most do the residents are millionaires and pay private), plus they generate so much through business rates , they don’t need to tax residential property. A band G home in westminster (likely valued at over £2m) pays £1695 per year at current rates. So they would double to £3400. Ask yourself, how much does someone living in a £2million home in Westminster earn?

And yet, we live in Oldham, our house is worth about £700k. Band G , built in 1998. It’s a good size, not huge. We earn £120k between the two of us. So good salaries, but that is spread between two of us, both of us pay 40% income tax. So good earners, not wealthy. Not a huge amount of disposable income after bills.

Yet we pay £4140 now, with this suggestion we pay £8280 per year. nearly £5000 MORE than the millionaires in Westminster.

How is that fair?

The suggestion is clearly being floated but it needs to be made clear that this cannot happen. It’s a horrendous idea.

We all know how bad council tax is (all property tax in UK needs updating). But because social care is paid for by councils (why), you ge the ludicrous situation where very poor councils, obviously have higher social care costs, so need to have high council tax. But the people living there, aren’t rich.

Yet very rich areas (Westminster), have very low council tax. So a £1m home in Westminster, pays roughly HALF the council tax of a £200k home in Oldham.

Now look at a band G home in Oldham. We pay £4140 per year. We are definitely NOT rich. The house is not a mansion, it’s a good size, on a nice street. But we earn £120k between us, both pay 40% tax. We don’t have a huge disposable income.

Yet band G in Westminster, is only £1695 per year. Band G in westminster is around £2m-£3m. The vast majority of these are NOT owned by little old ladies who bought the house in 1953, they are owned by wealthy people, bankers, city lawyers (people earning over 300-400k).

So if you think all band G homes are basically people like those in Westminster, then you’re wrong. The majority are relatively normal employees, engineers, senior nurses, senior police officers, IT technicians (all people in our street that live in band G homes). ALL would likely be ruined by this.

https://trustforlondon.org.uk/data/income-deprivation-borough/

what you say about Westminster isn’t true and that’s one London borough - other London boroughs have high council tax rates. So using Westminster as an example is misleading.

it’s easy to dismiss London as full of rich people but it has some of the highest poverty in the country due to the high costs to live there (as shown by this https://trustforlondon.org.uk/data/poverty-over-time/)

Yep and they were panicking last year about a RIGHT WING RUMOUR that the pension lump sum would be cut. Maybe a little patronising would have stopped the people cashing in their pensions to avoid a RIGHT WING RUMOUR.

Some of this though is that an insane amount of people simply refuse to sign up for e- billing. Our local council practically begs people to open an online account to view their bills/ communications etc but there are a surprising amount of computer illiterate people out there who just refuse to.

They are moving to contacting people by email and text where possible but that only works if customers keep their contact details up to date. So then people aren’t receiving their bills on time, people fall into arrears, that costs time and money in recovery.

Council tax is an imperfect system - areas like Tower Hamlets have the lowest CT rates in the country - because they are densely populated and there’s a huge amount of people to tax, meaning rates can be more reasonable, but also because the council can generate loads of income from local businesses. You just can’t do that in the same way in, say, Cumbria.

Councils covering rural or less densely populated areas have to decide what amount is needed to be raised to cover policing/ social care/ waste collection/ parks etc. With less people to tax, those amounts will always be higher. Plus the fact that bands don’t necessarily match up - round where I am there are 2 bed flats in band E - ones that were built around the time of first banding in 1991 seem to have fallen foul of that particular idiosyncrasy as they would have been priced higher as new builds.