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.

Exactly, council tax rises are mostly funding this. And i go back to my original example of where a single person household pays more CT then 2 working adults next door (per person). Yet all 3 will need adult care and the 2 adults will not have paid in as much.

I honestly would rather NI went up to cover adult social care like we have state pension or income tax this way every working adult pays in. I know in reality you are paying for generation above blha blah bit the principal is the same.

There are always people for whom changes to tax are not ‘fair’. Certainly, as someone in the process of moving house the idea of stamp duty disappearing just after I’ve paid it seems pretty unfair. But it’s not about me. It’s about the collective good.

we need house selling to be fairer. We need council tax to be fairer. We need people to be able to move more easily. It’s an idea that needs working through, but if it does that for the benefit of those worst off that’s a good thing. Even if it’s not great for you as an individual.

Well you could argue that the single person is more likely to need adult care, as they have no spouse and possibly no children to help them. I am single btw, but I pay full CT because I have an adult child in the house. Who isn't working, so can't afford to pay.

When you read stuff like this you realise the question isn't with what Burnham may or may not propose to do with CT.

The real question is why it has gone on like this for over 30 years without someone actually doing something about it.

Why is everything that's for the benefit of the so called 'worst off' always a good thing? How do you even define who is worst off?

Take a family a family with five children that live in social housing and claim benefits and have a parent that's eligible to claim PIP. On paper they will be some of the 'worst off' in society but the reality is that an equivalent working family that also only claims PIP for one parent would have to earn £80k per annum to afford the same lifestyle and many people on this forum would consider that family wealthy. Say the latter family can't access SH and both families live in the Southeast then it's totally possible that the latter family will be on the hook to pay this expensive new property tax whereas once again the former family pay nothing.

This isn't about individual gain over collective gain as you are trying to frame it. It's about mounting a cash grab on homeowners that bought their homes without any idea that such a tax was possible and aren't eligible for social housing that basically exempts people from the tax. So once again we end up subsidising some people at the expense of others that are barely managing themselves.

Let's get this straight:

• the people in the cheaper London boroughs are funding their own local services. If they can afford to charge less it's because they can deliver their services for less.
• If you arbitrarily charge them more then presumably this money will be redistributed to other areas to subsidise their local tax intake
• the net contributors in these scenarios won't be able to vote for the local councils in areas where their money is being redistributed to.

How is this not taxation without representation? Do I want to fund schemes like Thurrock Council's solar farms? Absolutely not, but if local people want to elect high spending councils with crackpot ideas then what say will I have?

The only "straight" thing to get is that there is huge inequality in what people pay in council tax over the entire country, and how wealthy they are has little bearing on what they pay relative to other areas.

The idea that someone in Westminster in a £20 million house should pay far less than someone in the north in a £200000 house is just utterly bizarre.

No, you don't just get to side step the idea of democracy because of perceived inequality.

Council tax is a local tax to pay for local services. It is a fundamental part of local democracy as the council is able set tax rates and spend the revenue. This is why we have local elections and councils can set out different visions at a local level and appeal to local voters.

Virtually every other tax doesn't work like this and places like Blackpool already benefits hugely through national subsidies. The people of Westminster are almost certainly already hugely subsidising the people of Blackpool.

In principle, if it replaces or offsets the council tax, and is applicable to all properties (as it is in countries like the US), I don’t really have an issue. Am fed up with only the south or people with properties over a certain value being targeted - so long as it is universal and the monies go to local services (again like the US - it set by the individual states and goes into state funds, not into central government coffers) I don’t think it’s unreasonable.

We are high income and therefore higher tax payers - but we really do not mind paying the taxes we do - we just want it to be properly spent and benefit the people it’s meant to, not fund DEI and unnecessarily management tiers at the expense of the services it is meant to provide or the people who really need it.

I don't think it will work like that otherwise you will have some areas with a huge amount of money and some with very little. The issue with places like Blackpool will be even more stark! The only way it works is if it becomes another way for some areas to subsidise other areas that are already receiving a huge amount of subsidy.

Almost certainly is doing a lot of heavy lifting there.

Ok, how about they certainly do.

The average annual income tax paid by residents in Westminster is approximately £43,700, in contrast, residents in Blackpool pay an average of around £2,890 per year,

I honestly wonder about your frames of reference. You didn't seem to know that rural areas were more expensive to serve, you don't think SH is subsidised, you thought Westminster might not be subsidising Blackpool....

I live in London in a Victorian terrace house that we bought 20 years ago. We are absolutely brassic and can barely meet our bills every month. We are close to retirement age but still have mid-teen children living at home. This tax would destroy us and we'd have to move. It would be approximately double our existing Council Tax.

There’s no need for personal insult just because you disagree with me. I know social housing isn’t subsidised and provided a Hansard link as evidence. I questioned whether Westminster is subsidising Blackpool, no evidence has been presented that it does, just “almost certainly” now amended to “certainly” with some figures apparently plucked out of thin air.

I do understand that - I wasn’t very clear - and that is what annoys me, as it just another revenue generating method for central government.

But if it WAS done so that it operated at a purely county/local level, there would be wealthy and deprived pockets in every area - so the wealthy in each area would only subsidising those in the same county.

I live in a posh part of Surrey. They may make a killing in revenue in the immediate area around me, but within a mile there are still council homes and areas where children are experiencing deprivation. If the property taxes on my street and adjacent ones, contributed to additional police support, community engagement projects for those people, additional support staff at schools/social services etc I’d be happy. I want services to be good for everyone, I want a better/richer/safer community. Ie, I feel my taxes should go to the borough/county to be used within that region and, like I say, this is how it operates in the US.

It galls me that this is not the way it has been set up though. I also think that while it currently only targets the properties over £2m, that threshold will be lowered in time so that, ultimately we will all be paying a charge. Those who are crowing now that the ‘rich’ are having to pay it, will soon find themselves similarly impacted.

Absolutely and I agree with you, it should be used locally like the CT is.

Social Housing is definitively subsidised. Why do you think the Affordable Homes Programme exists? I didn't see your Hansard article but it won't prove SH isn't subsidised by the state because it is subsidised.

The figures aren't plucked out of the air.
https://moneyweek.com/personal-finance/income-tax/average-income-tax-by-area

But SH is only indirectly subsidised. It is not subsidised in the sense that most people use the word.

The land and building costs are subsidised with one-off grants and that’s it for direct grants. Local authorities will absorb any losses from below market rents. However because market rents incorporate profit, below market rents do not necessarily incur loss. It depends on how well the LA manages.

Approximately 70% of SH tenants are retired, employed, or in full time education. Some SH tenants, by no means all of them, are on benefits including the old age pension. However it is double counting to call this a subsidy to SH and this is not methodologically respectable in the social sciences.

Glossing over the grants given to build a property is like glossing over the fact that someone was given a huge inheritance to fund half the purchase price of their house and then pretending that this wouldn't impact ongoing mortgage payments and suggesting that the homeowner is funding the cost of the house themselves. They may be meeting the cost of payments on the mortgage but the mortgage would be a lot higher if they hadn't been handed a large chunk of money in the beginning.

If Burnham wants to implement significant changes then he will have to put them through parliament in the same way as the same way the council tax was put through parliament in 1992.

There will be no "sidestepping of democracy".

I did not gloss over the building grants. I believe I am the first person on this thread to have mentioned them!

These cannot be thought of as ongoing subsidies. When most people say ‘social housing is subsidised’ we know they are not referring to building grants. Otherwise someone else - you, perhaps? - would have mentioned them before p27, to say nothing of the other two long threads on this topic.

Of course. Where is anyone suggesting otherwise?

There have been posts on grants and UC re social housing as I googled and posted it here.

This thread isn't about whether SH is subsidised or not so why would I have mentioned it before @blossomtoes assertion that SH isn't subsidised and her insistence than a random Hansard article proves this is just plain fanciful.

I absolutely disagree with your assertion that subsidising building costs doesn't equate to a long term subsidy. Of course it does. The mortgage comparison is absolutely relevant. If I came and paid off half your house now then your ongoing costs would be lower and you would be paying much less every month. That's how it works with SH too. Subsidy isn't just in the form of someone handing over money every month to meet running costs. The costs of running my home day to day are less than the cost of my mortgage.

Yep