Council tax & stamp duty reform

[PeonyPatch]

Who is in favour of this policy?! I think I might be…

Council Tax desperately needs reform.

I dont think I know enough about it and there is nothing in bbc news about it. What is it you like about it OP?

I like the idea that the gov could generate tax from property rather than hitting workers more.

And less from households that are already squeezed.

So is it proposing a complete removal of council tax?

I saw something that said it would be based on property value. How is that fair if you have a £500k flat in London or a £500k mansion with lake in Scotland….Rachel reeves needs sacking.

Leunig, who authored a 2023 report for the think tank Onward, suggested abolishing council tax and replacing it with an annual property levy linked directly to house value.
Under his model, households would pay 0.44 per cent on the value of their home between £80,000 and £500,000, capped at £2,196 a year, plus 0.54 per cent on the portion above £500,000.
For example, a family in a £650,000 property would pay the maximum £2,196 to their local authority, plus another £810 to the Treasury – a total of £3,006 a year.
Homes worth more than £1m would face an additional 0.81 per cent charge on the value above that threshold.

I don't understand how they decide what your house is worth though? Surely it's only worth the price people will pay... as they say when it comes to selling a house!

I believe the property tax proposed is on the sale of the house, and would be based on the sale price. Like stamp duty basically, but instead of the buyers paying it, the sellers would.

Council tax is utterly regressive

A land value tax would work much better
the maths is not complicated
as the full Land Registry set (which is never ever published) has the interpolation data needed.

But I wouldn't be selling my house? Some people inherit houses too...

And Probate values go to land registry when the deeds are updated.
Job done.

You don't have to inherit through death.

No, but a transfer value has to go to the Land Registry to update the deeds
and the CGT details for a non market value transfer will still show the true value.

Totally agree it needs reforming

And who decides that value?

Interesting

I agree with the need for reform, and also for local business rates. I await the details of a proposal though.

The rules for property valuation at non arms length and the Land Registry disclosures are all on the relevant websites.

There was an article on the Jeremy Vine show at lunch time with the creator of the scheme. It was very informative.
What they do need though is a cut off of say 10 years for the annual payment.

The problem is that all land is not registered. Estates and the like that have been in one family since 1066.
Labour have asked the Land Registry to look into compulsory registration which should in theory make a land value tax easier to implement.

Unsurprisingly such a tax has been opposed by the landed classes historically.

Exactly! I’m sick of being screwed over in the South for stuff like this.

I'll listen back to that thanks

Agreed. Most houses in London and the South East however modest are £500k and over as are many flats.

Lots of people living in these houses aren’t money rich just property rich. As such they don’t really feel the effects of having equity as it doesn’t affect them unless/if they move. They might of been living there a long time and bought at well under £500k and earn modest wages or even minimum wage. Or they’ve got huge mortgages and again are getting by. I’ve heard figures of 0.5% been thrown around of property value for the proposed new tax. That’s a huge increase from council tax or is this new tax on top of this figure? Lots of people especially closer to the threshold will struggle to pay this - maybe it should be much higher for London to make it fairer.

If lots of people move away from London to be below the £500k threshold they’re going to push up property prices elsewhere, maybe then houses outside the SE will go above £500k as well. It will also make London even more unaffordable for lower or average home owners. It would affect renters too, rents would rise to cover this.

I do agree that stamp duty should be abolished and instead be a tax on the seller rather than the buyer. Though this presumes that everyone has equity in their property which isn’t always the case.

I am well aware of the amount of unregistered land
in rural areas its around 30%
BUT
that just means that the ownership has not changed since 1972 when the registry was formalised.

The ownership and value of the vast bulk of the occupied land is very well known
and a double charge on occupied unregistered land would sort that PDQ
(nice money earner for La Reeves that only hits the 0.01%)

Unoccupied land is much lower value so less stress