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.

I would expect them to be billed a tax based on the value of the property they live in like everyone else. Wouldn’t you?

Because they were wealthier enough to buy the more expensive house in the first place.

Make sure you look at comparisons of house price increases vs inflation excluding house price inflation. Otherwise one is impacting the other and you’ll find very little difference between the two and end up with results skewed in your favour.

You say RPI and CPI but which are you actually comparing? CPI needed to validate your points

Ultimately people in bigger houses normally earn more so are already paying more tax through wages. So it does seem unfair they have to pay more again especially when they have the same amount of bin collections, street lights, etc as someone in a cheaper house.

I say that as someone in a cheap house so I’m not whinging because I’m affected.

They are “renters” so don’t have to pay according to the link up thread.

You have no idea how they funded the purchase of their house. They could easily have less disposable income than you now.

Again, why should you pay less than someone with the equivalent type of house in another area. They don't own a mansion either. They might have kids and need that many bedrooms and need to stay local due to childcare etc. Why should they subsidise your local services?

Yes, but if I can’t pay it, the apparent plan is to collect it after I sell/pop my clogs. What is the plan for someone in a property they don’t own?

You need to move away from the idea that council tax is a tax to pay for local services. It is to the extent to which it is paid to the council, but it isn’t as a rate which meets the cost of those services, otherwise councils in wealthy areas would be loaded (fewer people living in poverty with housing or social work needs). It’s just another tax. Instead of earnings it’s on assets held. Which is a good thing. We need to spread the tax take between earnings and assets out more. And I’m speaking as someone who’s bill would double if this was brought in.

It depends, will it replace council tax? How much will it be? How will they value the house or is it just the land? It could be very unfair but without the details who knows.

Have they actually published something that I've missed, everyone seems very certain how much it will be, I thought it was just vague suggestion at the minute.

The hilarious thing is that my original comment on the thread was that as much as I'd love to pay less council tax (which I would with the proposed property tax), my local council would go brankrupt. Ie I was actually realistically against it.

But of course someone on MN latches onto a harmless gripe about high council tax to have a go...

No. If you think it's unfair, move to the North and buy a cheaper house and take advantage of the lower tax.

It is 100 more… at first. Initially. What does that mean? It means in a few years it’ll be sky high.

But then the northerners would be priced out of their areas and would complain…

And how do you sell the house with the huge annual bill attached to it? Just created a new stagnant housing market.

Do we think the local authorities will be paying central government 0.96% value of each council property per year (it’s double where more than one property is owned)? I can’t see it myself.
Private landlords will pass the cost on (but take the blame).

Renters rent will also have to go up if landlords have to pay more tax on their property, they are not running a charity.

Council tax is to pay for local services.

From the government's own website Council Tax is a tax paid to your local council(s) for the delivery of local services.

The tax is not redistributed at a national level and I don't know why you believe it is? This is why some councils can charge much lower rates.

How is taxing a house that I own only 10% of a tax on my assets? Will the bank pay the tax for the 90% of the asset that they have a claim on?

Exactly, I don't know why people don't understand that low house prices in an area can be a good thing, especially if they have never been high. Nobody with negative equity and housing is much more affordable.

Indeed, renters rents will go up (a lot in London) but the Landlord not the government will be blamed of course…Renting will become even more expensive, but owning will now be more expensive too!

Stamp duty doesn't really affect downsizers who have lived in their house for a long time though does it. Are you forgetting the massive tax free income the ones sitting in the more expensive houses will have gained in equity from their house price rising?
It is more unfair on the ones taking their 1st step or step up as we will be paying tax on the sellers profit. Should be scrapped and replaced with a capital gains tax for all, at a different rate to those who buy for profit

Income has been too heavily taxed in recent years. Frozen personal allowances have led also to fiscal drag.

The problem is life for many these days is like playing monopoly when the board is already owned.

I like the proposal.

Many work hard, many don’t but renting families often have it the hardest. Not really fair they pay full council tax, whilst next door might own their house outright, be on means tested benefits and get council tax paid.

Inheritance too is not something that’s earned nor is increase in house equity or value. If wages are earned and fair game, those who have more assets should pay more.

There are winners and losers with every policy but for once, a progressive tax that could make things overall fairer. The millionaires can’t easily move a house abroad.

All to give people that already benefit from cheaper house prices and lower rents an effective discount on their council tax. I honestly can't believe anyone thinks this is fair.

Agree, they’re not necessarily wealthy but house price inflation makes it look this way

switch on Home in the Sun and many of the the purchasers seem to be from the North?

This won't lead to a reduction in income tax or raise anymore money. It simply removes stamp duty and gives people in cheaper area a discount on their council tax and those in more expensive areas have to makeup the shortfall.

It is not aligned with income so isn't progressive

That would not necessarily work out cheaper. In fact it can be the reverse.

If I moved to London and bought a property in Westminster worth many times my current one I'd pay a lot less council tax than I pay now.