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.

You're only better off if you want to move. Those in big houses will not be better off at all. LVT of .48% on a house worth £1.5m gives a charge of £7,200. Council tax on same property is likely to be in the region of £4000. So not better off at all, UNLESS you want to move.

There is a reason they're capping it at £1200.

Well if you paid your stamp duty already and many years ago with no intent on moving how are you better off? In my case lvt will mean I pay even more than I do currently with council tax.

You still owe the difference it is just rolled up into a debt , presumably with interest which is paid at the when you sell.

The current system is fairer than the fairer share property tax. The issue is bringing salaries up not dragging people down.

If the majority will be better off e.g. paying less than they do now how are they funding adult social care which is a big chunk of most councils costs. The numbers don't seem to add up. If they had announced it alongside adult social care reform it might make more sense.

I'm an American. Local governments and schools are funded primarily by property taxes, and it's not widely seen as unfair.

Commercial properties are taxed in addition to residential properties. When you buy a house, you have to budget for it alongside your mortgage payments and other housing costs. They're not a surprise to anyone. And voters can accept or reject the local and school budgets, which determine total tax collections.

And you're free to move to an area with lower property taxes. I've done that myself.

I thought it was going to be capped for the current owners and then the full amount kicks in for new purchasers as and when the house is sold. Could be wrong on that though. Where did you read otherwise?

Everyone has set up their finances based on the existing tax structure. A change like this, will create disruption as people reconsider their finances and what they can afford.

A lot of households in the Southeast could be facing 10% of their after tax income going to property tax. Many won’t find this sustainable and will sell. House prices likely to drop. Interesting to know how houses will be valued for this tax. At their sale price? What people have put on their mortgage applications? Surveyor estimate? Can it change if the market dips?

They don't care about fairness. The aim is to get people with real wealth into larger homes so they can raise more tax from them. It's not unlike a landlord evicting tenants they know can't afford a rent increase, then replacing them with tenants who can to extract even more money without the government having to do a thing.

All the people feeling pleased about the reduction won't be smiling when their own increases kick in, and they will. Student loans started out much lower than they are today. Instead of stamp duty, you now have an annual charge that can keep increasing for the rest of your life. Let's see how that works out when people are living on a pension.

capped at what you have to pay but you still owe the balance - a deferred liability. Devil is in the detail.

Isn't that kind of them - a charge based on an unrealised value, on an asset you already own.

It says in the article that they wouldn't.

Only the inefficient asset hoarders pay...😉

That's just messed up, it really is. Lets hope this doesn't come to fruition.

His proposal wi mean annual house values are used to determine how much you pay so if like we had just after a cocid a price surge you annual bill will end up more than the year before.

Since house prices rarely go down significantly we can all look forward to increasing lvt bills not to mention it will start off at 0.48% and they will fond ways to increase that % to. Seems like better off selling up and renting to avoid paying lvt!

Deferring is only if your in hardship snd majority of working people won't fall under that.

And of course for single person no discount.

Absolute fucked if your in London on a single income having to find an extra £100 a month.

LAND value

or

HOUSE value, though??

So anyone in social housing would pay nothing? So no council tax and no property tax either? But the schmuck with a mortgage has to pay, and anything they can’t afford is rolled up and collected when they sell/die (probably with interest) ?

A lot of houses will be falling in value if they have a large property tax attached. Then the new owners will surely demand a reduced property tax as the house’s value has gone down - or will it be once decided, the band remains come what may?

Nobody knows. He has mentioned both previously. He has also liked Fairer Share.

When you think about how many people who bought home in the last 5 years that could not afford to buy those homes now. It's insane.

I wonder the same @MaturingCheeseball . This law is likely to cause an overall fall in house values in the Southeast. Let’s call it “a levelling down”. Will councils recognise this and lower tax charges accordingly? Or will they be lazy, greedy and avaricious? If so, expect a further spiralling downward.

It’s like every other Labour tax policy, not only is it not fair at all, it will cost them more to implement than the additional tax revenues it will generate.

I’m fairly sure the 0.48% figure was attached to land value not the building itself.

It may reduce costs at the top end initially, as people rush to sell, but you're also likely to end up with two, three and four-bedroom homes in more "affordable" areas becoming even more competitive, with downsizers, first-time buyers and growing families all chasing the same homes but in lower lower annual tax bill areas.

People in those homes are likely to stay put unless they really have to move. Home improvements that increase a property's value could also increase the annual tax bill. So do you extend and pay more every year, or just make do? It will be interesting to see what that does to the home improvement market.

You mean a different not fair from the conservative way, where most land and wealth is owned by a few wealthy men ?

0.48 is mentioned on the Fairer share site too.

This is affecting ordinary people. Well, apart from renters apparently.