What are your thoughts on replacing council tax with land value tax?

[MikeRafone]

So what are the thoughts to scrap council tax and instead tax value land?

that is what Andy Burnham wants to do if he gets where he want

he sees council tax as a regressive tax, as unfair and wants to see it changed to a land value tax.

Churchill was. In favour of Land tax as a fairer system. Advocated for by Adam Smith the founder of modern economics and Milton Friedman adviser to Margaret Thatcher

Westminster doesn’t have a massive population but does have poverty.

trustforlondon.org.uk/data/boroughs/westminster-poverty-and-inequality-indicators/

You can’t do that because someone could just put in a planning application for your house. You don’t actually have to live there to ask for planning permission.

That would be a good way to bully someone into selling

The big message this sends, is don’t be successful! Dont bother to run a successful business or employ people. Dont make a profit or be successful at work. Dont aspire to anything better. It’s typical Labour who don’t understand economics and it’s the politics of envy - again. Burnham should concentrate on our economic growth, not taxation and punishing people.

Huge nail on the head. You can't tax nor borrow out of the huge national debt we're suffering. We need economic growth, we need businesses to start up, need businesses to grow, need more people to work and more workers working more hours. We need to stop all the tax and benefit cliff edges and stupidly high marginal tax rates so that "work pays". Unfortunately I doubt Burnham is the man who'll do it and sadly expect more sixth form standard politics of envy, more benefits, etc.

It’s based on a very outdated view that everyone in the South is rich and the North is poor. People in expensive areas are already struggling with high prices of housing plus the fact that everything is more expensive. In my DH’s company those based up North in the exact same role are doing very well, have big houses, cars and expensive weekend hobbies. Down South in the same job we are barely managing. Plus the social care costs down South are much higher due to care home fees being so much more and a larger ageing demographic. But all the money from the South is going to be funnelled up North?

I live somewhere where council tax is really high. We don't live in a mansion, not at all, and we pay £4.5k a year. A small garden as well.

Someone two roads down lives in a small two bed semi and pays £3.5k.

Shocked to hear that it's only £1k per annum for hand D in some places!

I think the problem is that some councils have got themselves into a financial pickle and others are much better run. So why should the well run subsidise the badly run?

I do think care/SN costs should come from central government though. They have pushed too much down onto councils to get it off their balance sheet

Yes, but it's not always about how well/badly they're run. Run down areas with lots of social problems, high unemployment, poor health, etc., are always going to cost a lot more, but with much lower revenues from council tax and business rates due to empty shops/businesses/factories etc and a higher than average proportion of residents claiming reductions in council tax due to being on benefits etc. I think we need a completely new funding formula, remove social care etc from local councils and make it centrally funded. But even policing and fire services cost more "per person" in run down areas with social problems as statistics prove there is more crime/anti social behaviour etc.

Some ground rents are at a peppercorn rent, you can't expect the freeholder to pay a land tax.

Agree. They need to be better at charging costs out to eg football clubs for policing a larger perimeter

@Badbadbunny There have been reports looking at this and the ideas generated always come back to insurance! There’s NO money to centrally fund it! Those on benefits with no property get funding anyway. swapping who pays makes no odds and many LAs have central funding anyway! So it’s not going to make any difference. I still favour insurance and unlike NI, it would be ring fenced.

If landlords pay the LVT, then would they pass that on to their tenants in the form of increased rent?
What happens if their tenant was on Council Tax Support?
What happens to people who claim CTS but own their home?
Will there be LVT support for people that were on CTS?

Land value tax seems too much like an envy tax to me. So people who use the services can pay nothing, yet you own a tiny piece of land and you pay pay pay. If they bring this in I dont know what my Mother will do (lives on state pension only in small 2 bed house)

Absolutely right. It seemed like all the suggestions were designed to take from those who have a little.

You should only pay tax on money you have, not on money you could have, IMO. So many of these proposals are based on paper valuations at a moment in time but don't reflect the reality of individuals. Curious to know if anyone has done the sums on a 'local' council tax where eg 1% was added to income tax each year and ring fenced for local services. Has anyone come across anything like that?

taxing the "worker" when you have 22.5 million adults in UK not working

13.2 million pensioners
9 million inactive people
unemployed 1.7
students 2.4 million
long term or with disabilities 3 million
carers, looking after home 1.5 million

you can't keep taxing the workers more and more

so would probably need a system that's based on what income there is to a household including benefits, but proportional. I dont know how it would work but some bright spark must have thought of an alternative!

But then people would buy assets with their "spare" money to avoid paying a tax on "money you have". So it won't work.

We've already had years of people buying business assets to reduce their IHT liabilities due to the business asset relief. Some even borrow money to buy business assets when they had no spare cash to do it, as the loans reduce the value of the estate.

Authorities setting taxes really need to start understanding the behavioural aspects. People have been taking "unexpected" actions to reduce tax for centuries, i.e. bricking up windows to avoid/reduce window tax, architects/builders using bigger bricks to avoid brick tax, builders building long narrow tall buildings to avoid "width" taxes.

If there was a tax introduced on "money in the bank", people would spend it and/or buy investments with it, so it would be utterly pointless.

Can someone explain why council tax is unfair and land value tax is fairer?

to me it seems like another opportunity to bash home owners, landlords and the SE.

Or just make ALL forms of income taxable at exactly the same rates, no special reliefs/allowances based on different types of income, age, etc.

A good start would be scrapping NIC which is a tax on workers and increasing income tax (for all) instead.

We need to get to a stage where everyone with the same income (from whatever sources) pays the same tax, regardless of age, disability/unemployment, worker or retired, UK or foreign income, etc etc.

So the worker earning £30k pays exactly the same as the OAP with pensions of £30k who in turn pays the same as the person on an assortment of benefits with income of £30k.

Keep it simple and fair.

It's not "fair", it's another example of the politics of envy and spite beloved of the Labour lefties. They don't care whether it's fair or whether it benefits the country, they just want to punish people they don't like, hence the VAT on private schools, IHT changes to farmers, etc etc.

If you have 100k and put it in the bank you pay tax on the interest. If you put it in shares you pay it on the dividends. You then pay CGT on the profit on sale.

with this tax you are paying tax on the £100k itself

or even worse - market value rises to £150k and you pay tax on that but then the following year you sell for £140k

unrealised gains shouldn’t be taxed

and if you have a 50% mortgage on the property - should that be taxed?

Council tax is supposed to pay for council services so there should be a link between the expenditure and what they need to raise. This wont be the case with lvt

The housing associations will go nuts and it will be something else that MNers will say SH tenants get for free