To think an annual property tax is incredibly unfair?

[Itchthescratch]

I come from an area with low house prices. It is great! My friends can generally afford houses even with lower salaries as the earnings:house prices ratio is better. Rents are also lower so they have proportionately more disposable income.

I have moved to a more expensive area where house prices are higher and people have really had to push themselves to buy a property. Salaries are higher but not high enough to make up the difference. They have had to pay more stamp duty , pay more interest and have less disposable income each month.

I am really struggling to understand why my friends in the South should also automatically be paying more property tax under the new proposals being suggested by Burnham supporters? What is the justification? They would love to buy a large detached house for £300k like my friends from home but this isn't possible. It feels like they are being double penalised.

Just to add house prices haven't risen in real terms in the area in live in now for 20 years so the value of my friend's houses is simply money they have paid in.

We bought our house last year and 0.48% of the value is basically what we pay in council tax now.

What I do think is a stupid part of this policy is that wealthy areas would then rake in far more council tax, allowing local services there to improve. And in poor areas with lower house prices, the councils would get less, leading to further loss of services.

its not going to be less than the C T and plus if you’ve already paid out SD recently

Private firms coming in to buy the places up, @smallglassbottle?

Unless such companies have some really good bungs to offer I'd have thought it more likely the Burnham types would want the properties compulsorily purchased at knockdown prices by the state, thus sticking it to "the rich" and increasing housing stock at the same time

Stamp duty disincentivises people from downsizing into those bungalows and also therefore reduces the pool of larger homes. It's daft.

People are buying bungalows to convert because they can't afford the larger homes. Land duty would help rebalance this in theory.

It will be less than council tax for 75% of the population.

But this isn't instead of council tax (which goes to fund local councils). This is an additional tax for central government coffers.

No, it’s instead of council tax.

Not sure this argument makes much sense.

The current 0.48% is rated to keep the overall tax take the same as from council tax and stamp duty I think. So no increase overall in taxes. But a redistribution from the richer to the poorer.

Yes I suppose in future they could up the % charges to increase the tax take.

It's not as if I haven't seen my council tax rise year on year as well though.

I suppose it does ask the question how they will manage yearly increases for inflation etc.

But this isn't instead of council tax (which goes to fund local councils). This is an additional tax for central government coffers.

Yes but the government won’t run it, it will be run and financed along the PFI model (financed by private equity, leased back), so we’ll all end up renting from The Man/Big Property Inc.

Pensioners will end up in HMOs.

I get so frustrated by the definitions of wealth.

I live in a house in London by virtue of the fact that i was raised where I live and bought when it was possible to buy in London (I am mid-fifties). Our council tax is almost £4k a year, we pay all the subsidies that go with living in Lonodn nad on our modest joint income of around £70K, this means we are penny pinching are struggling every month. We have no savings because we can't afford to save. We literally can't afford to move and have ties to where we live in terms of work, education, caring duties and so on.

But we live in a house in London, so come on - fleece me some more.

If that’s true and I’m not saying it isn’t why would the government make this change? Will the difference from the other 25% of the population make up the shortfall?

I do feel sorry for anyone who has recently moved, paid stamp duty and maybe really stretched themselves for a more expensive house to find their council tax is going to be replaced by something even more expensive.

personally if it’s 0.48% of house value I will be better off.

What I do think is a stupid part of this policy is that wealthy areas would then rake in far more council tax, allowing local services there to improve

Not a chance, @WhatAMarvelousTune; they'd simply reduce the central government grant paid to such areas and spend it on vanity projects the less affluent ones instead

You didn't really think they'd tolerate those paying the most tax actually expecting to see something for it did you?

But you do have more wealth to be able to have the bigger house, etc. You just don’t have as much disposable income as you are paying for your life in a more affluent part of the country which has better infrastructure and job prospects.

When will people stop moaning? Move back up north if you don’t like it.

Yes, I also believe that this is part of a wider agenda. People get so sidetracked by the considerable market value of houses that they often overlook the basic security that having your own home brings to you.

Some people then invariably bang on about the 'ridiculous obsession about owning your own home' - often comparing our position to that of much of Europe; but the fact is that SOMEBODY has to own it.

I could sort of see their point if those homes were all owned by and then rented from the local authorities/the state (and if you don't care about the personal security angle for you and your family); but this bizarre argument very often turns into berating people for selfishly and greedily wanting to own one home whilst leaving those who would thus own potentially dozens or even hundreds of homes completely free of criticism.

Oops looks like I'm wrong but in that case I don't see how this will raise any additional tax monies overall.

It will just drive more and more high earners from the uk.

Earning a £200,000 salary costs your employer £237,500 in total. Of this total labour cost, 49.5% goes to the government in taxes. Your actual take-home pay is £117,786, which means your true effective tax rate is 50.5%when factoring in both employee and employer taxes.

Add in car taxes, vat, council tax, private school vat, taxes on fuel and energy bills, and the raft of things you are not entitled to at that salary and it becomes significantly over 50% if you live a typical lifestyle at that salary. It becomes nonsensical to earn well and strive to achieve in the UK.

Under the current proposals if you have used your high base salary to leverage into a flat/house somewhere commutable to say London (and paid stamp) they now want more of that asset too. To pay an additional 0.48% on your say £2m home brings your effective tax rate up by the difference between the current council tax and the new wealth tax - I am guessing circa £5k or 2.5% on £200k base salary.

England IS lovely and has many advantages, but I think lots of higher earners have had enough. The current system isn’t perfect but why should a GP in the NE of England not pay the same council tax as one in the South if they use the same services (or none). Higher earners have already paid increased income taxes etc, and this is further double dipping. Everyone I speak to is planning on moving, and are encouraging their children to move abroad too. The “broadest” shoulders will be slipping down to anyone with a salary over £30k by the time Labour has finished and house prices in the gutter.

Not necessarily, it’s house price inflation

so id be paying the same, if I had to pay .48% it would be marginally cheaper depending on the valuation, im a d band which is average

https://www.rightmove.co.uk/properties/157474112#/?channel=RESBUY

this property though would be paying £2,095.70 this at most right now as an H band. Which is less than most of the country average band D council tax.

Please explain why you think that is fair tax system

But on a .48% property tax would be paying £240,000

But doesnt everyone in London earn 100k? 🙄

It seems a common assumption on MN, and yet there will be more people in London earning NMW than 100k but the enormous salaries of eg lawyers, bankers, hedge fund managers etc will push up the average.

When will people stop moaning? Move back up north if you don’t like it.

But what happens once you've done that and are still pursued for more and more tax? Are the homes in the south just going to sit empty or left vacant by the rich corporations who are the only people who can afford them?

And where does that leave the people who live in the north in the first place? Surely, if hundreds of thousands of people from the south are now competing for the same number of northern homes... what do you think will happen to the values of those northern homes, and then the increasing amount of value-based tax payable on them...?

They'd have to centralise social care funding to make it work, otherwise loads of councils would be in the same predicament.

Yes those lines re people owning a house on mn and going on about EU rents, of course it’s better to have the security.

I like the concept. For too long income has been taxed more heavily. Hope it goes ahead.