Council tax & stamp duty reform

[PeonyPatch]

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

While that wasn't a smart claim for them to make, our dependency ratios mean we'd need to be looking at ways to move the tax burden away from income earned via work even if they'd never said it. We can't opt out of demographics.

Which isn't to say this specific policy is the best option, of course.

Land taxes are almost impossible to avoid
they are thus cheaper to collect
and can be flexed according to the area

Counties could set the rate locally to match their revenue needs
(as is done in nearly every other OECD country)

Counties could set the rate locally to match their revenue needs

Remember when Uni fees were brought in and the Gov said they could be within a range up to £9k? Guess what, every single Uni set fees at £9k. Why wouldn’t they?! Entirely predictable. Every local authority can think of ways to spend an unlimited amount of revenue.

You haven’t actually read the proposals at all, have you? Because that’s not how it is proposed to work.

But the £500K flats won't be in the most desirable areas of London. It's pretty much anywhere. People sometimes pay that to rent a flat in Knightsbridge or Mayfair for a year or two!

It's hardly like all the key workers on low wages on London can (or indeed should have to) commute in from the Midlands every day.

“Annual property levy based on value of the property” - how else am I meant to interpret it?

Try reading the actual report and base your opinions on facts. SDLT would be replaced by a tax, due when the property is sold (so not annually), on the value of the home over £500k at a rate of 0.54% per year. So if you sell a house for £750k after living in it for 10 years, you - the seller - would pay about £40k at point of sale, after any house price growth. You only pay when the house is sold.

Council tax would be replaced by an annual property tax on values up to £500k. This would be payable by the owner every year at a rate of 0.44%. Or £2.2k each year for a house costing £750k.

The report is here:

www.ukonward.com/wp-content/uploads/2024/08/Onward-A-Fairer-Property-Tax.pdf

So, little incentive to sell a high value property, log jamming the system and increasing prices under the threshold, whilst leaving people with less money to pay for their next property?

In local authority areas where Council Tax is already above the £2.2k but the Council is basically bankrupt (like mine) they will have less money to spend on already shit services?

Doesn’t add up does it?

and how is it exactly fair on generations below the baby boomers that are facing a cost of living crisis on top of a housing crisis? I don’t think they deserve to be taxed more!

People need to build up capital for their old age. If they don’t, they become a burden on us all. So we do not want to discourage this.

There are two main stores of capital for “regular” people, their pensions and their houses. In expensive areas people will have to put more into their homes and won’t likely build up their pensions quite so much. But that’s okay because when they retire, they can downsize to a cheaper property further out. In that way it all evens out in the end. Swings and roundabouts.

This proposal upsets that balance that people have relied on. It’s as much another pension grab as anything else.

I was looking to downsize, get out of London and enjoy life in 10 years. Not so sure that makes sense now.

it seems labour are trying to look at fairer wealth distribution across the UK, which I personally back. We also need to stimulate the economy and house market.

The thresholds and percentages were set to raise the equivalent amount as current SDLT and council tax, but if you’d actually bothered to read the report, you’d know that. It is designed to remove the current inequality of councils with high ability to raise revenue and low social needs, such as Westminster and Kensington and Chelsea, having low council tax, whilst those with high needs and poorer communities unable to bring in income to pay for their obligations.

All of the points you raised are at least as bad as the current system. By placing the SDLT on to sellers, you make it easier for people to trade up and also ensure that anyone responsible for the tax has the opportunity to pay for it out of equity.

Yes it does. If you’ve already paid SDLT on your current house, you’d be exempt from its replacement. So you could sell your house without paying the SDLT replacement and you’d almost certainly face cheaper council tax in your new place.

I was in favour of the poll tax. Why on earth should we NOT pay for what we consume on a per-head basis, as we do for other things? So two people in a house pay the same as the 4/6/8 people in the next house, how is that fair? We live in a rural area, with no lighting, no pavements, poor roads, no public transport, no amenities, but pay the same as someone in a city centre and I don't see how that's fair either. I don't know how else it could be reformed but surely the number of people living in a property, and thus consuming council services, must have some bearing.

Largely because it costs as much to empty Doris’ bin as her next door neighbours’, pay for her street lighting, fire service and police.

Would single people still get a 25% discount?

Lots of widows are probably paying quite a lot of their monthly income onto council tax but just get a 25 % discount.

Ive always thought the single person discount of 25% was a strange rule and quite unfair.

Is council tax different to the community charge then? People didn’t riot when John Major introduced council tax . Infact he became PM because his predecessor Thatcher was forced out over it.

Yes, council tax is different to the community charge/poll tax. Council tax is per household, albeit with a single person discount. Poll tax/community charge is per head. They're two fundamentally different models.

The current model means some people who live alone on low incomes are paying quite a bit of their monthly income on council tax. The poll tax meant some people on low incomes who live with others would be paying more of their monthly income on council tax than they do now.

Is it bad that I prefer the idea of a poll tax? I feel like it feels more proportionate 😳

My mum lives on her own, and I hate how much she’s having to fork out for council tax.

I think it's understandable to prefer systems that advantage your loved ones over ones that don't. We all have our biases. It doesn't strike me as a viable or sensible policy idea, however, for multiple reasons. One is that in a society with a housing shortage, it makes sense to incentivise the most efficient ways of occupying housing.

Rural services also cost more to deliver because of the less dense environment.

That’s true. Tbh my mum lives in too big a house than what she needs anyway. I’m a big fan of downsizing when you’re older.

The reality is they don't though. What do you think the bulk of Council Tax gets spent on? I'll give you a clue its not emptying the bins. Or running Leisure Centres - if they even have them anymore.

https://www.nao.org.uk/wp-content/uploads/2025/02/local-government-financial-sustainability.pdf

Page 17 Figure 1 gives the summary breakdown. Most on Adult Social Care and Chidrens Services.

From the same report

For example, every household receives a waste collection service in some form, while approximately 2% of the population over the age of 18 receive publicly funded social care services.

Single biggest area of Council spending - adult social care - goes on 2% of the 18+ population.

and

They spent £14.6 billion (20% of their revenue expenditure) on children’s social care in 2023-24, with just over 3% of children needing these services