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.

We pay £3000 annually for a tiny detached four bed in the South. Worth probably £400,000
meanwhile neighbours have added additional bathrooms, bedrooms, reception rooms and still pay less than us. Anything would be fairer than this daft council tax.

I have one property: my home - which I pay to maintain. I don’t own much else.

Meanwhile people send vast sums of money abroad every year, people own a great deal of jewellery, of cars or paintings, wine… I know property is visible, a great big sitting duck ripe for a tax raid - but focusing on the main home is not simply unfair but very unsettling.

The super mad thing is that people like you are actually what the state needs. Owning your home means you are much less likely to be reliant on the state in the future. You are more likely to be able to absorb financial shocks and fund your own care as you get older.

This tax makes SH an even more lucrative option and discourages home ownership. This is terrible for everyone as the scramble for SH will increase and supply will not.

They pay VAT on their paintings etc. should we pay VAT on house purchases?

Because property is an asset class that is taxed inefficiently currently. Stamp duty is a really, really bad tax. It stops people from moving house. As would adding CGT to house transactions. We need people to move regularly - skilled overseas workers, people moving to care for family, people downsizing to free up large housing for others. The taxing of housing transactions damages the country and we’ve got to stop doing it.

Shares - you’re taxed when you transact (stamp duty) you’re taxed on gains when you sell and you’re taxed on dividend income. If we bin stamp duty on housing (which we must) we need to replace it with another tax.

But there’s no ongoing tax on other assets, which a property tax would be.

As others have said, property tax in the US is a local tax, and comes with representation. The mooted property/LVT tax here would go in a central pot to be divvied up (by whom and according to whose whims?). Furthermore other US taxes are often less punitive than here.

This why I have said all along before inteosucing a lvt they need to tackle adult social care and remove it from council tax.

During covid and beyond there was no government subsidy for TfL they were purely funded by fares. It was only last yr I believe they managed to get something from the government but pretty much the majority of their spending is funded by fares. So no TfL is not massively funded by the government.

Tfl doesn't get an operating subsidy. It does get roughly £500m a year from central government for capital projects

I didnt distinguish between the two I said they recently have managed to get a subsidy again but during covid and shortly after they had no government help and were reliant on fares and they still managed to do some capital project work.

London already pays for the rest of the UK:
https://www.theguardian.com/business/2017/may/23/uk-budget-deficit-grows-to-more-than-10bn-as-people-spend-less

What would happen to renters under this idea. Would they have 0 council tax or property fee to pay?

Pretty much unless the owner (landlord) csn increase rent to cover it.

You keep saying assets need to be taxed. They already have been. In 1799 all assets in the UK were estimated to be worth about £2bn. Then direct taxation was introduced on all forms of income. Today, that figure of UK assets has grown about 664,000% to £13,300bn. Assets grow in value due to two things. Personal desire to own them, or the income they produce.

Net income is reinvested into assets. When those assets produce income, that income is taxed again. There has been no great uprising over the 227 years that people have been paying income tax. They pay it and reinvest. They have already paid it on funds used to buy a home and on funds used to purchase investments.

One thing we know is that when a state gets bigger beyond a particular point, its economy gets smaller. You cannot tax to prosperity. This year, through both central and local government receipts, about 39% of GDP will go in taxation (these are the governments own figures). Over the last ten years, central government tax receipts have risen about 5.7% per annum on average. UK growth has averaged only about 4.5% per annum. In other words, human endeavour is taxed proportionately more that it has been. That starts to choke reinvestment.

If introducing a property tax at 1% results in £500k homeowners paying an extra £1,500 or £2,000 a year in tax, the economy is going to feel it. If, as Burnham is being urged, taxes are raised to produce an additional £75bn a year, the economy is going will go into reverse. I do not believe Burnham is going to wade in and make those strategic changes that the 'think tanks' suggest he should.