Council tax & stamp duty reform

[PeonyPatch]

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

So is the value only decided once every 20 years or so when the house changes hands? And similar houses may be a palace or a wreck, structural damage, neds a new roof, etc.

They base council tax from property values from 1991 don’t they ? How does that work with the properties built after that ?!

An awful lot of workers own houses.

Agreed!

I think the tax band is decided when they are built.

I pay the same council tax in my 3 bed cottage as our neighbour does for their farmhouse and farm. Under the reform we’d probably pay less (current bill nearly £3.5k a year)

Yes, I do know that. But it appears to be targeting wealthier people?!

I don’t see why my partner and I have to pay so much in council tax when our house isn’t in a great area, and isn’t worth that much…

It’s unfair that a family of five live in a house and pay whatever council tax they pay. Yet Doris next door who’s a widow and lives in the exact same type of house only gets a 25% reduction..

The family of five use council services 5 times more than Doris. How’s this fair ?

That’s very true!

You sound like Thatcher when she announced the much hated poll tax that ended her tenure in Downing Street.

They tried a tax per head. It was called the Poll tax, was massively unpopular and led to the downfall of Margaret Thatcher…

The £80,000 starting point sounds kind of arbitrary - who lives in a home worth less than £80k these days? Barely anybody.

Unlike council tax base values, which were at least pegged a long time ago, this is then just set up to cash in on constant inflation. Yes, your actual CT goes up each year, but it's (supposedly) predicated on what councils need for public spending, rather than just what they reckon they could rinse you for.

House prices go up as always, so people have to borrow more to be able to buy them, then they're told that they're rich because they have a (heavily-mortgaged, very low equity) expensive house.

As PP said, I agree that people who live in London and other expensive regions are being done over by this, very unfairly - and I say this as somebody in a 'normal' Midlands town where prices are nowhere near as ludicrous.

It's fair enough to say that it's a privileged choice to live in a particularly desirable and expensive district or neighbourhood; but surely we can't dismiss entire regions of the country in this way?

And we all know how government policies 'progress', don't we? Even when taxes and levies are based on percentages - and so should increase organically anyway - those percentages tend to creep upwards as time goes on. And then, when people complain, we're angrily gaslighted with "Well, why do you think you shouldn't pay your fair share?"

Just like young students are told now, by politicians who got completely state-funded university costs; and this will be the same bluster tactic used when they scrap state pensions for new generations before long.

Indeed. But arguably it was fairer wasn’t it ? Doesn’t it make more sense to base council tax on the size of a household?

I don’t understand the celebration of high house prices. It’s all relative. It just means people borrow more over a longer term.

Remember the days of a house for £70k? It was only the 90s, not all that long ago.

That depends entirely what you're trying to achieve. An alternative argument is that the family of 5 are occupying housing space much more efficiently than Doris, and that it's only fair to have a system that recognises and rewards this in some way.

The questions about fairness are obviously difficult and subjective ones, and there isn't an easy answer. But we do need to start thinking of ways to ensure the tax burden doesnt fall even more on labour, especially as our dependency ratios get worse.

So were people financially better off with council tax than they would have been with the poll tax ?

I presume so because people didn’t riot when it came in like they did in 1990 which ended Thatcher.

It was in my opinion ridiculous that Sunak put in place a stamp duty holiday during Covid times.
Surely it made house prices go higher with people out bidding eachother ?
What was the benefit to the Tories then stamp duty holiday ?

Lots were. I think the particular problem was with low income families who had adult DC at home that couldn't afford to move out. Obviously that's an even bigger issue today than it was 30 years ago.

I've read the report from Onwards- it isn't that long and it is quite accessible, so worth a read. I think there is a lot of good sense in it.

Stamp Duty and Council Tax are both very unpopular taxes, but any change is also often unpopular which is probably why they've never been reformed. Labour might have to do something though or risk a series of council bankruptcies on their watch.

It will affect Londoners more than people elsewhere, in fact this is inherent in the design of the tax.

My first house was 56k - in 2002

Fucking ridiculous policy that was.

It's silly, isn't? You only actually benefit from high house prices if you downsize and/or move somewhere much cheaper (huge amount of stamp duty currently notwithstanding) or inherit a house.

But people just won't hear of it; and to be fair, none of us could ever change it on our own in isolation.

It's a similar principle to if, say, every single person earned £1m a year - we'd all enjoy being so very rich and profligate, wouldn't we?

Well, no, because we'd all be in the same position. Everybody you needed to pay to work for you would obviously cost you thousands of pounds a day. Prices would rise to what everybody could afford to pay. In reality, it wouldn't be much different from if we used potatoes as currency and everybody earned three potatoes a day (assuming they weren't unregulated and freely available otherwise!)

I think a lot of the attraction is from two groups who benefited without doing either of those things. One, those who inherited properties that had massively increased in value. So not the owners but their children. And two, people who stayed put but nonetheless benefitted from the value increase in their own homes. For better interest rates due to lower ratios, and also for some who were able to withdraw equity to spend without really seeing the downside of this because the property still increased in value anyway.

Because those people have exactly the same amount of wealth as each other. Because they choose to buy a smaller property in a highly desirable location doesn’t make them less wealthy…

It’s a ridiculous way to raise revenue and deeply unfair. There’s plenty of pensioners who bought their houses decades ago, paid off the mortgage out of taxed income and just because they’ve been alive during a period of huge property value inflation (due to myriad reasons) they are now expected to come up with additional payments whilst on a fixed income??

The bottom line is that this Gov stupidly hog tied themselves by saying they wouldn’t raise taxes for “working people” which is requiring them to come up with whizzy wheezes to raise money which appear ill thought through / ideological (private schools)