Would taxing property values be fairer than the Council Tax?

cepheus

Seems a good idea to me. Unearned capital is taxed, and most people gain.

From the Joseph Rowntree Foundation

Would taxing property values be fairer than the Council Tax? The Council Tax is widely discredited. Would taxing property values be fairer and could such a tax help to reduce housing market volatility? This report assesses the likely impact of a property value tax. It finds that:

• a progressive property value tax would reduce the size of median gross bills by £279 a year compared to the Council Tax;
  
• the bills of almost two-thirds of households would fall by more than 10 per cent, while fewer than one-quarter would experience increases of more than 10 per cent;
  
• a progressive property tax would reduce gross median bills for the poorest tenth of households by £202, and increase them for the top tenth by £184;
  
• London would need to be handled differently because of its high property prices; a property tax could have a supporting role in reducing house price volatility.

PasturesNew

No, what about the person with a modest home that happens to be somewhere that wealthier people suddenly think is "desirable". You get priced out of where your family have lived since the Domesday just because 3 articles in the Guardian said it's a great place for a 2nd home or holiday home or retirement.

Also, value is somewhat subjective until a point of sale.

I'd rather see two extra bands stuck on the top, for the really rich ..... if you look at the top (Band H) valuation it's a low point to stop the banding at.

Bantex_2

The old rates system seemed to work pretty well.

wotsthat

cepheus wrote: »

Seems a good idea to me. Unearned capital is taxed, and most people gain.

In another thread you argue that the only beneficiaries of HPI are down-sizers, inheritance beneficiaries and BTL merchants. Why tax people on the HPI in their house if there's no benefit for most of them?

Raising money for local spending doesn't have to be linked to houses at all. Why not link it to income via a local income tax, sales tax, a lottery, services paid for at the point of use etc?

For some reason it's been decided that people living in bigger houses pay a bigger proportion - a new system that decides people living in more valuable houses pay proportionally more is hardly radical - it's a tweak on the current system.

Ronaldo_Mconaldo

But the idea of council tax is that it's to fund the services that the council provide. The size of house and wealth of owner does not have any effect on that. Except it does in that the richer person might send their kids to private school, will generally not smoke and get exercise so be less reliant on the NHS etc. whereas the poorer will generally be a burden to the job centre, their kids will go to the local comp and generally be a burden on their teachers the poorer they are. They'll be smoking and drinking and costing the NHS a fortune.

Therefore taxing the rich doesn't make sense here.

AndyGuil

Non-primary homes are already subject to CGT. If you tax primary homes watch the entire market grind to a halt as no one moves.

We already have stamp duty anyway which does the same thing.

Generali

PasturesNew wrote: »

No, what about the person with a modest home that happens to be somewhere that wealthier people suddenly think is "desirable". You get priced out of where your family have lived since the Domesday just because 3 articles in the Guardian said it's a great place for a 2nd home or holiday home or retirement.

Also, value is somewhat subjective until a point of sale.

I'd rather see two extra bands stuck on the top, for the really rich ..... if you look at the top (Band H) valuation it's a low point to stop the banding at.

This happens in France. A poor country area will suddenly be discovered by foreigners and suddenly all these little old ladies get taxed out of the family home.

Why tax property at all? We don't tax the capital value of shares or bonds. I'd rather see incomes taxed. Wealth should only be taxed at death.

Bantex_2

wotsthat wrote: »

In another thread you argue that the only beneficiaries of HPI are down-sizers, inheritance beneficiaries and BTL merchants. Why tax people on the HPI in their house if there's no benefit for most of them?

Raising money for local spending doesn't have to be linked to houses at all. Why not link it to income via a local income tax, sales tax, a lottery, services paid for at the point of use etc?

For some reason it's been decided that people living in bigger houses pay a bigger proportion - a new system that decides people living in more valuable houses pay proportionally more is hardly radical - it's a tweak on the current system.

Property tax is difficult to avoid, hence its popularity.

The current system is not about property values, but relative values in a particular administrative area though. So separate rules would not be required for London.

wotsthat

Bantex wrote: »

Property tax is difficult to avoid, hence its popularity.

Don't really see your point. Most taxes are difficult to avoid by design.

Bantex wrote: »

The current system is not about property values, but relative values in a particular administrative area though. So separate rules would not be required for London.

Don't know why we're locked into the idea that the proportion we pay towards local services should be linked to the size of our houses.

Bantex_2

wotsthat wrote: »

Don't really see your point. Most taxes are difficult to avoid by design.



Don't know why we're locked into the idea that the proportion we pay towards local services should be linked to the size of our houses.

Because it is simple and easy to collect, even very rich people now tend to pay property taxes whereas most don't pay income tax.

Generali

Bantex wrote: »

Because it is simple and easy to collect, even very rich people now tend to pay property taxes whereas most don't pay income tax.

Not true. Very rich people pay the vast majority of income tax in the UK.