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.

Because 2 people in a band E house uses less council utility (bins and stuff) than a a band B house with 4 people.

It’s not a big thing, just a funny little giveaway. Everyone who doesn’t work professionally with tax calls it ‘stamp duty’, but everyone who does calls it ‘SDLT’ or ‘stamp duty land tax’.

Stamp duty on property was largely abolished in 2003, and replaced by the distinct SDLT. Stamp duty, the old tax, is still technically payable in very unusual circumstances (e. g. if you exchanged contracts in 2002 and complete now), so no tax professional ever confuses the two by calling SDLT by the colloquial ‘stamp duty’ as everyone else does.

Love this. ❤

That’s a great question. No one knows.

Personally I am bored with repeating, half a dozen times on this thread, how important I believe it to be that any LVT be phased in gradually and with due care for the vulnerable. TBF, Labour is the party most likely to take that care. But we can only wait and see.

I’d pay it cause I work in tax policy and it is SO MUCH so much fairer for other taxpayers with more volatile DC pensions, who have to fund them themselves, while also underwriting my State Pension and my stable, gold-plated DB workplace pension.

Fixed it for you.

The social care bill is what is hitting most local councils the hardest. A single pensioner might generate huge adult social care costs, while four working adults might have very little impact on the councils cost. They are certainly not getting 4 bin collections and stuff.

But renters will use all the local services the same as everybody else. Why on earth shouldn't they pay if they can afford to? Should we deny them adult social care and not take their rubbish away because they have paid nothing towards these services? What about their neighbours that had to buy their house as they weren't eligible for social housing and wanted housing security to raise a family? They are stuck paying the tax and you think this is fair? Even though the social housing occupancy could be earning more, have less outgoings, enjoys totally secure housing and is already paying below market rent for the privilege? Don't you see how some people are going to be subsidised beyond belief, all at the expense of everyone else?

Roughly based on someone on an ordinary salary who bought a house in Brixton before gentrification, which I'm taking to be pre The Fridge, and what that house might be worth today. Basically someone whose salary is nowhere near their house's paper value.

The more I think about it, the more I think social housing will break the policy. Even if most people save money under the new rules, very few will stomach the fact that those in SH who already pay subsidised rents will not pay the tax and won't get it passed on to them through their landlord. This will create a whole new level of inequality and cause outrage, especially because SH isn't means tested. How many articles will we need about the people earning £100k plus living in council houses and paying no tax whilst a poor widow on the same street is being made homeless by the tax? Not many before outrage reaches epic levels and the policy is withdrawn.

The renters will end up paying it through increased rents, and there will be even less landlords making it even harder to rent somewhere.

Renters absolutely should pay, I presume they will be able to apply for discounts if an OAP, single adult, severe disability requiring additional space to meet need, like they can with council tax

How can a renter apply for a discount due to disability, low income etc, if it is their landlord footing the cost?

I dont believe council tax will be cheaper. I suspect it will be on top of council tax

just tax the super rich even 1/2 a % could
make a huge difference.

There are not enough super wealthy for this to work. Believe it or not. The lvt is a replacement for Council Tax and Stamp Duty. Sorry if you already know this.

Absolutely, but I don't think the landlord should be paying it, it should be the tenant, and the inability to apply for discounts is one of many reasons why.

That single pensioner will have paid more in CT per person than the 4 working adults living the same house who will one stage need care themselves at a huge cost whilst paying in far less than a single person.

Does anyone know the rationale for excluding renters from the LVT? It may be administrative or legal, i.e. owners can be traced via Land Registry, but tenants can be transient. However I think there is an obligation on landlords to inform the council when a person either leaves or takes up a new tenancy (not sure which) for the council tax, but since an apartment/flat/house renter does not own the underlying land, that may be the reason they are not liable for LVT.

I wish they would tell us why renters are excluded. I want to know the reason!

Probably because renters aren't owners of any land. You can't tax someone who doesnt own any land.

Yes, that was one of my theories above! I think renters will pay anyway via increased rents. I wonder will SH tenants' rent increase if the council/HA is the landlord for example?

however they can pay for services like everyone else has to

But Londoners typically pay less council tax than people in the north, due to receipts for business rates and commercial property. Is that fair given their typically higher salaries?
https://moneyweek.com/personal-finance/council-tax-burden-highest-lowest-uk

We could go backwards and forwards all day by choosing different metrics. Some will favour the single pensioner, while others will favour the four adults living in one house. One metric in isolation isn't going to get us very far.

The long and short of it is that taxing a home based on an unrealised paper value is a thinly veiled cash grab.

We have no idea what will happen to people in social housing. There could be some kind of new fee similar to how renters in the private sector will absorb LVT (presumably with protections for those on low incomes).

Again, we can only wait and see

Social housing/council rents aren’t subsidised.

I agree that LVT will be passed on to tenants by private landlords. I also wonder what will happen for SH.

And in many cases the disposable income won’t be there for the cash grab.