Rough Times Ahead........

warmhands.coldheart

qwert_yuiop wrote: »

Since the rest of us have to pay more on our rates to make up for the cap enjoyed by those in big houses, it'd be a bit rich (?) of the poor (?) dears not to cough up.

Could be interesting. Round here, a couple of colossal houses are inhabited by people who were almost local royalty ten or so years ago. Post crash, they're down with the peasants. Imagine getting a rates bill for £5000 when you drive a van. Auction...

You see personally I do not agree with rates in that they are essentially a House tax. Considering they are used to "provide funding for services at both local (your council) and regional (NI Assembly) levels", then surely it should be based on house occupancy rather than cost of the house.
Why should a couple with no kids living in a £350,000 house pay more rates than a family with 5 kids living in a £175,000 house.
Chances are the 2 people will produce less waste, make less use of public amenities, use less water/sewage..... etc. etc. etc.
Even assuming both couples are on similar wages / household income, why should the childless couple pay more on rates just because they decide not to have children and instead buy a lovely big house..
They pay their taxes the same as everyone else they have just decided not to have children thus have a much higher disposable income which they used to buy a big house.

I think they should do away with rates completely and instead just increase the number of bands on stamp duty on house purchases and increase the % paid.
i.e.
>£100,000 - 1%
£100,000 - £149,999 - 2%
£150,000 - £199,999 - 2.5%
£200,000 - £249,999 - 3%
£250,000 - £299,999 - 4%
£300,000 - £399,999 - 5%
£400,000 - £499,999 - 6%
£500,00 + - 7%
£1,000,000 + - 10%
that in conjunction with increased income tax for higher earners......

saverbuyer

They are essentially a pseudo wealth tax where the people with less wealth pay a disproportionate amount compared to those with more. I agree there are better ways to do it, not sure stamp duty would ever be able to cover it.

You rates liability is based on your house rateable value. That’s the measure. The amounts of services you use or don’t have nothing to do with the amount you are required to pay using the rateable value as a measure. If we can accept this, and remove service use from the argument for retaining the cap at (450k), you can see why it’s unfair to everyone with a house at 1-450k to be subsidising those with houses at 450k plus.

warmhands.coldheart

OK so here's a scenario....


Husband, Wife & 3 kids live in Detached House, 150sqm. £240,000 rateable value. Bought house as a bit of a wreck at a knockdown price but still had to stretch to afford it..
Spent 5 years doing it up as a nice family home, nothing fancy in the house as can't really afford it but house in a nice area.. Drive a 10 year old family car and 6 year old Ka for the missus... Both work, little savings as salaries just cover outgoings.... (Childcare, kids clubs, food.... etc..etc...etc.)

Neighbours

Husband & Wife live in Semi-detached house. 105sqm. £145,000 rateable value. He drives a Porche and his missus drives a Range Rover.... Both £40,000+ Vehicles...
Both Work. hi disposable income

Who's the wealthiest ?? should one pay more in rates than the other?

saverbuyer

warmhands.coldheart wrote: »

OK so here's a scenario....


Husband, Wife & 3 kids live in Detached House, 150sqm. £240,000 rateable value. Bought house as a bit of a wreck at a knockdown price but still had to stretch to afford it..
Spent 5 years doing it up as a nice family home, nothing fancy in the house as can't really afford it but house in a nice area.. Drive a 10 year old family car and 6 year old Ka for the missus... Both work, little savings as salaries just cover outgoings.... (Childcare, kids clubs, food.... etc..etc...etc.)

Neighbours

Husband & Wife live in Semi-detached house. 105sqm. £145,000 rateable value. He drives a Porche and his missus drives a Range Rover.... Both £40,000+ Vehicles...
Both Work. hi disposable income

Who's the wealthiest ?? should one pay more in rates than the other?

It's hard to debate the hypothetical. I can’t answer who has greater “wealth” in the above scenario. I imaging the two in the smaller house pay more income and consumption tax, the first ones pay more rates.

Wealth and income isn’t the same thing.

You're arguing about removing the current rates system and replacing it with a tax based on income and with an increase in stamp duty. I'm saying that we have the current system, for better or worse, and it's unfair for people in houses worth less than 450k to subsidise those in houses worth more than 450k. Let’s sort this inherent inequality out with the current system first.

I'm not saying it's a perfect system, I'm simply saying less wealthy people pay a disproportionate amount of rates.

qwert_yuiop

No taxation system is perfect. However, the rates system has been adjusted in favour of those with bigger houses, effectively giving the asset rich a tax break. Since the money has to come from somewhere, one man's tax break is another man's excessive tax. This is not the case with income tax - high earners do not have their income tax capped, forcing the lower paid to pay more.

The other pointless point of view promoted by the beneficiaries of the cap is that they would be penalised for having saved their money as indicated in the last post. Well, they've already benefited from the tax paid on purchases by those who blew every penny they earned. Particularly those who generously wasted all their money on beer and fags, willingly donating vast amounts of alcohol and tobacco duty to the exchequer. How high would Vat be if no one smoked?

saverbuyer

About 3% higher.

6% if you couldn't have a beer with your fag.

qwert_yuiop

warmhands.coldheart wrote: »

You see personally I do not agree with rates in that they are essentially a House tax. Considering they are used to "provide funding for services at both local (your council) and regional (NI Assembly) levels", then surely it should be based on house occupancy rather than cost of the house.
Why should a couple with no kids living in a £350,000 house pay more rates than a family with 5 kids living in a £175,000 house.
Chances are the 2 people will produce less waste, make less use of public amenities, use less water/sewage..... etc. etc. etc.
Even assuming both couples are on similar wages / household income, why should the childless couple pay more on rates just because they decide not to have children and instead buy a lovely big house..
They pay their taxes the same as everyone else they have just decided not to have children thus have a much higher disposable income which they used to buy a big house.

I think they should do away with rates completely and instead just increase the number of bands on stamp duty on house purchases and increase the % paid.
i.e.
>£100,000 - 1%
£100,000 - £149,999 - 2%
£150,000 - £199,999 - 2.5%
£200,000 - £249,999 - 3%
£250,000 - £299,999 - 4%
£300,000 - £399,999 - 5%
£400,000 - £499,999 - 6%
£500,00 + - 7%
£1,000,000 + - 10%
that in conjunction with increased income tax for higher earners......

"Decided not to have children". Who's going to be paying their pension in 30 years' time? Health care? Nursing home fees? Somebody else's children.

warmhands.coldheart

qwert_yuiop wrote: »

"Decided not to have children". Who's going to be paying their pension in 30 years' time? Health care? Nursing home fees? Somebody else's children.

well if going by what's reported that it cost on average £180,000 per child to raise to 18 (I think that's the age) having no children should mean you should have a LOT of savings, investments or assets !! Someone remind me why I had Kids !!!!

qwert_yuiop

Aye - for some not very close relative to inherit and spend. Don't forget the inheritance tax that her maj's people will be getting. Oh dear.

qwert_yuiop

Down south there was no residential property tax until recently. Stamp duty was however 9%.

Here's the way they do it in Zurich. The amount you would have to pay to rent your house is assessed. This is considered as if part of your income. You then pay the equivalent Of the income tax on this amount. This then varies depending on what you are earning else where.