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

But council tax funding is flawed. I believe Westminster residents pay some of the lowest rates of council tax because the ratio of council costs is so low. Compare that with the deprived areas, say Blackpool, Hartlepool, etc., with high unemployment, high council costs of the consequences of deprivation, i.e. policing, crime, health, benefit payments, etc. You can't spread very high costs of supporting a deprived area with a very small number of people who are paying, i.e. not on benefits etc.

I'd radically change things. I'd make funding for police, fire services, health, social care, benefits, infrastructure, etc straight from central funding, and leave council tax just to pay for direct local services, i.e. street cleaning, parks, local roads & pavements, dog fouling, refuse collection, car parks, local initiatives etc.

Yes I agree - central government tried to massage the books by pushing funding responsibility to councils on things that shouldn’t come from council tax

council tax is a regressive tax and is considered unfair because it takes a larger percentage of income from low-income earners than from high-income earners. Because the poor spend a much higher proportion of their earnings on basic living expenses, these uniform taxes force them to sacrifice a significant portion of their disposable income

you have bands A - H on council taxing H can never be more than double D band

D band is the average band across the country

whereas H can be 5 million or 10 million but will only ever be double the cost per year of an average price home D band

In the same way the suggested land tax is also highly flawed. People in the SE lose a far higher portion of their earnings to house themselves. They have less disposable income to spend, not more. They are already spending a higher percentage of income. Those in areas with cheaper housing have more to spend.

The problem with council tax is that it’s just another layer of unaccountability. They’ll spend what they raise

its also another way to price people out of London

It’s the reverse of unaccountability. Councils are democratically elected. If you don’t like the way the money’s spent you vote them out.

How will all student houses be assessed? At present they pay no council tax.

I mean, the devil's in the details. We'd need to see an explanation of how it would work really, wouldn't we.

That said, the UK is a staggeringly unequal country in terms of land ownership. CBA to Google the exact percentages, but a very small number of people own an extremely large percentage of land. So if this would make them finally pay their fair share, it wouldn't be a bad thing.

And taxing wealth not income seems to be the way forward, so 🤷‍♀️

OK, I did do a light bit of Googling. Couldn't find the figures I was looking for, but this article by Oxfam on the super- rich is quite an eye opener.

Makes sense to stage a raid on an asset they can't easily hide, doesn't it?

https://www.oxfam.org.uk/media/press-releases/richest-1-grab-nearly-twice-as-much-new-wealth-as-rest-of-the-world-put-together/

Thank you for that link @crackofdoom. That really is shocking. I bet it’s got worse too.

Leaseholders/Owners/Landlords share it? Landlords have the option of bumping the rent to cover it if they can risk losing a tenant?

Thank you, @MikeRafone , for pointing out that LVT is not just a nasty Socialist notion!

I believe in countries that have it they have different rates for different areas rather than the same rate country wide

Any tax will have flaws but it’s the gradient of the flaws that will be the decider

I hate the idea. Ok I have the benefit of a garden but it is expensive and time consuming to maintain and then to get taxed on top for the sake of it is quite depressing.

I think a home is essential, if you want to raise taxes on the rich find something that is actually a luxury product.

In America rates are set locally but they don’t particularly vary with house prices.

Areas with good services and schools have higher rates of property tax. They also tend to be desirable, and therefore to have more expensive housing. High property tax rates do not depress house prices.

My post above was for @BeardySchnauzer

@poetryandwine

is the money ring fenced for local use or does some go higher up the chain/redistributed to poorer areas?

No one knows, as no formal proposal for a new tax exists.

I meant in the US

Yes.

A home is essential. Several large mansions with thousands of acres...not so much. That's the kind of people a decent land value tax should affect most.

A garden is a luxury product in the UK now, families crammed into flats will be cheering on Andy"s garden tax.

The problem with a lot of the ideas is that they’re not about finding ways to push everyone up with the intention that the gap will close - just pushing the top down to close the gap but not make anyone better off

LVT would not be charged on those things. It would be the volume of land for your plot. If your plots are on the same land mass you’d pay the same.