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 live in the US, where property tax pays for local services and there's a good deal more devolution both at state and municipal level than there is in the UK.

Property taxes are calculated based on an estimated valuation of the property. There are exemptions based on age. You pay more for properties that are not your primary residence.

Services funded include the libraries, park district, police, and local schools. There are many more.

If you are living in a property valued at $1million, your taxes will be higher than properties of lower valuation, on a sliding scale. Higher valuation will result in higher annual taxes.

When you buy a house, the current annual taxes are included in the description so you know what you're getting yourself in for.

As property values rise, taxes do too, with different towns and cities in the county assessed at rotating intervals. You can file for a correction if you think your assessment has risen too much or of you think your valuation is based on incorrect information (like four bedrooms instead of three, more bathrooms than you actually have, etc).

Nobody is thrilled about property taxes, but everyone realizes that the quality of local amenities, especially schools, and crime stats, are big factors in maintaining or improving property prices, so you have to weigh what's important to you when you're buying.

Obviously, local control over spending, and local referenda over proposed increases to benefit various local agencies make property taxes more palatable.

I don’t think SH tenants pay for the maintenance of their home.

Under Section 11 of the Landlord and Tenant Act 1985, the council or housing association is entirely responsible for paying for and fixing:

• The Structure and Exterior: The roof, external walls, windows, drains, gutters, and outside doors.
• Essential Utilities: Water pipes, gas pipes, electrical wiring, and electrical sockets.
• Sanitation: Toilets, baths, basins, and sinks.
• Heating and Hot Water: Boilers, radiators, and fitted heaters.
• Health and Safety: Treating severe damp and mould.

Smaller repairs they do pay for though, eg. accidental damage or neglect.

I also understand they can pass on
their SH property to a dependent when they die.

Surely SH needs to be means tested/ reviewed? As taxpayers, we are being asked to pay more tax, but meanwhile once on the SH ladder, the rent is cheap & repairs are free for life (& your offspring’s).

If or when the taxes get too high relative to what they're getting out of the services, people do sell up and move.

A house in an area of good services, schools, responsive police, etc, will become more valuable over time than a house in an area of poor schools and high crime. Your property taxes are a form of investment that will pay off really well.

That would probably work out the same as my council tax on a £450k home

A new SH tenant has a property that is an empty shell that is devoid of paint/wallpaper and flooring. They are expected to pay for that.

I know people in SH who have had to move into hotels because the council wont fix the damp/mould issue that is making their DS very ill. And the building they are in has been condemned and everyone has to move out... to where? They have no clue.

SH tenants can only pass tenancy on once. That is usually from one spouse to the other.

i understood this about the US system which is different to what would happen here. It wouldn’t be linked to local services like this.

The biggest thing this country needs is a massive SH building programme. The little quibbles are meaningless,

The divides and resentments created by the reliance on the inflated private market which is ultimately subsidised by 'state benefits' which are claimed by working people who should have no need to rely on state cash handouts but have to because of the current reliance on the 'market'.

That 'tie' needs to be broken. Our people need to be housed in properties they can afford to pay for out of their wages, the rest will follow.

I don't want a US system. There is not much I would want to import from the US.

I agreed. But that requires a state with vision and a back bone.

It's not little quibbles. It's completely unaffordable. The average social home costs £200k to build. How could you build/buy enough homes to house everyone that wants one? Remember that lots of home owners would probably switch to SH if they could because a lifetime tenancy with very low rents is better value than owning your home, being responsible for all the maintenance and paying almost the entire value of the house again to a mortgage company in interest payments. We also know that the average SH renter pays very little each year beyond the actual day to day costs associated with the housing so it's not like the state will recoup their investment for a very very long time. How could they service the debt and interest payments associated with all these new social homes?

I'm not being churlish. I just think we need to be realistic. This can't be the answer even if you want it to be. We can't afford it.

Shelter has also said:

Recent research by Shelter and the National Housing Federation found that building 90,000 social rent homes a year would pay for itself within three years, add over £50 billion to the economy over 30 years and support 140k direct jobs in the first year. Put simply, it’s a no-brainer.

https://england.shelter.org.uk/support_us/campaigns/social_housing/made_in_social_housing

I have been unable to find any evidence it has asserted that a 50 year tenancy would save the renter £500k. I’d be interested in seeing that if there’s a link to support it.

I'm in the south east. That amount works out lower than my current council tax.

It's all pointless really, as all that will happen is that it drives up property prices in the north until everyone is complaining they can't buy anywhere. Distraction.

I've given up on the idea that a big property is desirable.

For now. Revenue generation goes one way, ask the students,

SH tenant on a full repairing lease here - i.e. I pay.

It's shared ownership. The house cost the HA £45,000 over 30 years ago. As above, upkeep doesn't cost them anything. I've paid more back in rent to date than they ever paid to buy it. I work. I don't receive UC. You seem to be saying it should be taken off me and I should be forced into a mortgage so a bank can make a profit. If you want to know what's wrong with the housing market, it's your logic.

The stupid thing is that you're all focusing on the rich people in London. They exist, but they are still not the majority.

What would you say to someone living in a poky dump of a bedsit, paying a fortune for it. What about the significant numbers of poor people in council homes in Westminster - tax them to the hilt because they have rich neighbours? Or exempt them altogether?

Nope, I’m saying that in my opinion, SH needs to be means tested/ reviewed. And good for you that you’re on a full repairing lease as the majority of SH tenants aren’t.

I agree completely. The building costs would have been discharged long ago with the small excesses from SH rent from various tenants over nine decades, after maintenance costs.

I believe that those arguing against you have no figures to support their claim. Of course they could prove me wrong by showing us the numbers.

The maths is here in terms of average savings. You just need to multiply for lifetime savings.

https://www.insidehousing.co.uk/news/social-rent-is-over-60-more-affordable-than-private-renting-shelter-finds-86688

The research you allude to is rather questionable. They have basically stated that shock horror, pumping a load of money into a capital program would deliver economic benefit. This is true for all CAPEX projects including HS2 or building a new hospital so the question is what specific benefits can be delivered through the building of SH. The three year payback period is about overall economic benefit, is strongly linked to stimulating the construction sector and is built on some pretty optimistic assumptions. Even with these assumptions the state only gets paid back after 11 years. Do we really believe SH will deliver huge savings due to people suddenly finding employment and not needing the NHS as much?

For sure. Oh, and I used to private rent a 1 bed flat, and I was paying less than people in SH. Which goes to show landlords can charge what they want, and what they charge should not be what is aspired to.

I lived there for 15 years. Property taxes in my town gave us a quality of life I dearly miss.

You can work it out yourself using current figures. It costs £200k on average to build a social home.

You stated earlier that:
According to last year’s figures average SH rent is about £490 per month or £5880 per year. The average cost of maintaining a unit of SH including maintenance and repairs of the individual property, the common area and the management fees is estimated to be somewhere between £5K and £6K
So let's generously assume the tenant is paying a surplus of £500 a year towards the capital of the build so the average SH tenant will pay back the value of their property in 400 years.

I also haven't factored in the interest the government will have to take on due to having to borrow money to fund the house building.

I don't think my DM's modest 3 bed cost £200k in in the 1930s.

They’re linked to local services. Is that what you’re advocating for?

She also hasn't paid almost £6k in rent per annum since then. It's called inflation.