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.

If it’s in addition to council tax, he needs to think about voter retention, unless he thinks only renters vote for Labour.

if it’s instead of council tax I assume he’s working on the numbers - piss off 25%, please 75%. Hope the 25% aren’t mobile enough to move ex Uk, causing the property market to dive and harming the economy.

It is never going to happen, there simply aren’t enough qualified accredited surveyors in the UK to go and value every single property fairly. And you can’t have estate agents doing it they aren’t even regulated, so I just can’t see how logistics work on this scheme. We are in a tiny house in a wealthy area, so if they do a blanket post code valuation etc we would be paying way over what our tiny cottage is worth as most surrounding homes are 2m+.

I also think whoever is valuing will drop values if they are handed some cash, so the whole scheme is flawed.

I'm assuming this would be instead of council tax.

For us, the proposed 0.48% of property value would be slightly more than our current council tax, but not ruinously so.

It certainly has the potential to reduce the unfairness where people in cheaper parts of the country can pay more council tax than those living in more expensive houses in other areas where they could never afford to live.

The idea could only work if accompanied by a wholesale reorganisation of council funding, though. Otherwise the tax take in poorer areas of the country, which generally have lower property values, would plummet and the councils there would be left starved of funds.

It radiates money by doing away with stamp duty which is one of the main tax disincentives to growth. If we grow the economy we raise more tax without noticing it.

And not all tax reforms have to change the overall tax take. We need big tax reforms to incentivise growth.

Lol.

I love the way when it comes up on rightmove it says

"£24,000,000"

Can you afford it ?

Aside from that, I think it's weird how people go on about taxing millionaires and billionaires, that when the government does actually do something to tax wealthy people its suddenly unfair ?

Or maybe it's the billionaires that would prefer to spend their money on astroturfing rather than CT.

It’s not been decided yet so not fully clear, but I think it’s going to be EITHER stamp duty OR annual property tax. So if you live in a house you paid sdlt on you won’t be charged apt. If you move after the new tax is implemented then you will pay apt but you won’t pay sdlt. Whether it works out cheaper for you depends how long you live there. After 20 years you’ve paid more, after 5 years less. It favours movers over stayers.

presently if I live in Worcestershire - my council tax will go up by 9%

But If I live in Warwickshire it will go up by 5%

with a property tax set at 0.48% it takes away the ability by the council to increase my council tax and the property tax is set by the value of my home/housing market

This could be very interesting

The system at the minute is wrong people up north in small flats are paying the same amount as others with 4 bed properties down south in some areas.

I would be hit quite hard by this, but i dont think its unfair, no.

I own a very valuable asset. My house is similar to my sisters, but worth twice as much. That gives me choices. I have a store of wealth, i could move to her area and afford a home, she could not move to mine. I could downsize in retirement to fund care or pass money to my dc, her home would raise far less. My DC will inherit twice what hers will.

To afford this valuable asset i had to have a higher income. Plus many homes appreciate loads and that gain is never taxed!

The whole point is to even out the distribution of wealth/assets by taking from those with more. This will also tend to supress people investing in overinflated property, and make it more efficient to invest in other assets that are better for the economy.

Do you use less council services than those big houses? Do you have less bins, less children in school, less need for roads and pavements and parks than those big houses?

Council tax is for services not for houses being bigger.

Ok but you’ve already paid for that asset yourself. Why should I pay £528 a month for the privilige of owning my own asset?

Isn’t it instead of council tax though? So the same principle in that it’s a proportional amount of your property value - it’s just done on current value rather than an arbitrary valuation from over 35years ago?!
or am I missing something?

Having read a little bit more about the proposals my main concerned is how we'll afford it as a country, as I'm not sure it's going to bring more money in overall.

No one is going to suddenly get a council tax bill of £10k for their house, that's not how the proposal works. For people living in existing houses the maximum increase in yearly cost will be £1,200 pounds, but for the vast majority, the yearly cost will go down or remain about the same. If someone can't afford the increase it can be deferred until the house is sold.

When someone moves house, then the £1,200 increase limit doesn't exist, but firstly they know this in advance when they choose to move, secondly it's cushioned by the removal of stamp duty. Even then, it's not that bad - tske a £1m property in London. If someone moved in after this policy started, they'd avoid stamp duty of £43k, and council tax of say £2k a year and instead would pay £4,800 a year. They'd be better off with the new system for first 18 years of living in that property!

If the property was £750k and council tax of £2k a year, stamp duty would be £27,500 but they'd pay £3,600 a year - better off for 17 years.

By the time it's a house of £500k, people would be better off for over 37 years!

The only people who will be substantially worse off are people moving into multi million pound mansions.

For most of us the effect will be the equivalent of council tax remaining the same or a bit less, but with a new freedom to move house or job without being massively penalised for it.

I'm just now sure how any of this will raise money though, which is why I'm sceptical.

Taxing people on their private property (especially their primary home) is immoral, imo. As a pp said, it implies that the government is only allowing you to essentially rent your own home, which you can never entirely own. You've already paid tax on the money you've earned and been taxed again when you've bought something with it. Surely that's enough! But no, they want to tax you every year you own it and then take another slice of your pie when you die. It's obscene.

I don't think labour will last long anyway. I don't want,Reform to get in but before long I bet they will.

And those of us who paid £75k of stamp duty but then have to pay double what our council tax is too within just 5 years?

There will be some allowance or rebate. You may still be worse off but they would implement some sliding scale so it’s not so onerous.
Anyway, if it ever does come in, it will be a great thing.

Frankly, you live in a house worth £1.3 million if that's the case, I don't think £100 extra a month is going to cause you issues.

If I live in a £1.3 million pound house, happily pay an extra hundred pound a month to help reduce the tax burden on tens of millions of people in this country who are less fortunate than myself.

I did the calculations on my own house which is worth above a third of yours, and because we live in quite a low council tax area, ours would also go up, proportionately more than yours would. I still think it's a fairer system.

There's no sliding scale, there's two different systems as I explain above. For people in their existing homes (including ones that have paid a lot in stamp duty already), the maximum increase compared to council tax now is £1200 a year.

The full 0.48% without the cap only is applicable when someone moves house.

DH is currently so sick he cannot work and I am a student. The extra £250 a month would quite literally be the difference between us affording heating or not in the winter.

We would eventually lose our home if I couldn’t get more work than I’m cramming in between my NHS placements. Or else I’d have to drop out. The home we own outright…

Its a semi detached in zone 6 London. Not a mansion.

Socialist/communists like UK Labour are always jelaous of someone's elses money. That tax would be ridulous.

This thread makes for an interesting read. We lack details, but lots of pp making good cases both ways.

What can be agreed on is that Council Tax and Land Tax (in Scotland) are not fair systems and reform is needed. I agree with a “mansion” tax but do think we need exclusions for local areas where regular housing has become silly money. I think the mortgage problems are actually correcting things a little near me, but I still think a basic three bed property is by no stretch a mansion.

How do you know there will be the first line?

Mansion tax here in Scotland starts at £1m houses. That isn’t a mason by any means looooonnnggg way!

Why are you talking about 250 pound a month, it's £100 a month maximum, deferrable if needs be.

No one is losing their home over this.
No it is forced to make themselves work more and ill because of this.
No one's 'council tax' it's going to be shooting up to 10K.

It's a maximum of £100 a month more deferable if needs be, which a small proportion of the population will have to pay. A small place to pay for even out historic inequality which means some of the poor rest people are paying 10% of their income in coincil tax.