Council Tax Reform

PasturesNew

If it goes on the last sale, then there comes a point where it is prudent every 5-6 years or so to sell your house to a trusted person for peanuts, then buy it back for peanuts the next day

Maybe tying this in with a straight "swapsies"

BobProperty

PasturesNew wrote: »

If it goes on the last sale, then there comes a point where it is prudent every 5-6 years or so to sell your house to a trusted person for peanuts, then buy it back for peanuts the next day

Maybe tying this in with a straight "swapsies"

I rather think this will be prevented by similar rules to the tax rule that any "disposal" would be treated for tax purposes as having occurred at the market rate. You really would have to trust someone if you "sold" them your £500,000 house for £50,000. Let me know if you want to do it sometime

PasturesNew

seven-day-weekend wrote: »

I personally don't see why any form of local taxes should be based upon the value of your house at all. IMO, poll tax was fairer.

I have always agreed with this way of looking at the tax.

Why tax per house. The things it pays for are things for EVERYBODY to contribute to. Poll tax at least was more in line with that.

But an income tax would be a fairer way to go in my opinion.

Taking some fake figures out of the air: Three houses side by side. All worth £200k (because the figures are easy). In them live:
H1] Single pensioner - household income state pension of £5k/year
H2] Married couple, adult child - household income £60k: £25k, £20k, £15k
H3] House rented out by the room. 4 rooms. Household income £70k: £15k, £20k, £15k, £20k

Now - take a council tax of £1000.
H1] Pensioner pays £750 per person (£1000 minus single person discount)
H2] Pay £333 each
H3] Pay £250 each

Where's ANY fairness in that?

Council tax is for: schools, policing, street cleaning, lighting etc

Why should it not be viewed as:
Potential income £3000
Total people = 8
Pay each = £375

Or as an income tax the pensioner wouldn't pay (earns too little) ... taking just 2% off the 7 would yield the same amount

£60k+£70k=£130k.
£130k x 0.0225 = £2925

So those earning £15k would all pay £337

This is also a MUCH cheaper/easier way to collect the money.

BobProperty

I think you are missing how this works. The tax goes on purchase price and an annual increment, not the value. So in your example:

H1] Single pensioner - household income state pension of £5k/year
H2] Married couple, adult child - household income £60k: £25k, £20k, £15k
H3] House rented out by the room. 4 rooms. Household income £70k: £15k, £20k, £15k, £20k

Now - take a council tax of £1000.
H1] Pensioner pays £750 per person (£1000 minus single person discount)
H2] Pay £333 each
H3] Pay £250 each

So, lets say H1 was purchased 30 years ago for £8000
H2 was purchased by the couple as a family home 10 years ago, so £110,000
H3 was purchased as a BTL a couple of years ago, say £160,000

Therefore:
H1 is paying £80 + 30 years indexing
H2 is paying £1100 + 10 years indexing
H3's owner is paying £1600 + 2 years indexing The tenants are paying this in their rent.

Nothing like your scenario. It come with its own problems as it incentivises(?) the pensioner to stay put for one. Plus you can see that if the LA gets needy for some money they jack the rate of increase up.

If you are proposing such a system you can be sure to get all the pensioner OO votes. If, as in America, you have such a system and are trying to change it, you can be sure you'll lose all the pensioner OO votes.

Gorgeous_George

BobProperty wrote: »

Poll tax takes no account of ability to pay or income. If you want to start arguing about paying for what you, as an individual, use, it starts to get silly too.

We have income tax for that.

The services that are paid for by council tax should be listed and people should be able to opt in or out of those that can be made optional. then we would get rid of the 'services' that people do not want.

I think it should be based, in part, on the footprint of the property including gardens. For example, a 3 bedroomed bungalow would cost more than a 3 bedroomed town house.



GG

seven-day-weekend

BobProperty wrote: »

I
So, lets say H1 was purchased 30 years ago for £8000
H2 was purchased by the couple as a family home 10 years ago, so £110,000
H3 was purchased as a BTL a couple of years ago, say £160,000

Therefore:
H1 is paying £80 + 30 years indexing
H2 is paying £1100 + 10 years indexing
H3's owner is paying £1600 + 2 years indexing The tenants are paying this in their rent.

.

So I would pay what for my UK home which we bought in 1976 for £3000?
At the moment it is around £900 pa Council Tax.

PasturesNew

BobProperty wrote: »

the pensioner to stay put for one.

Yes, stay in a house you bought for £3k, or move and retire to a house costing you £200k.

BobProperty

Gorgeous_George wrote: »

.....The services that are paid for by council tax should be listed and people should be able to opt in or out of those that can be made optional. then we would get rid of the 'services' that people do not want.....

Part of me (the libertarian bit) says I'd love to see that, but another bit says that the public couldn't be trusted to get it right for many years. E.g. Social services - probably cost a big chunk of the bill. Large parts of the electorate will think sod that, bunch of do-gooders wasting time and money on noseying into how they bring up their kids, and vote for massive cuts to the budget. Next year, following on a weekly diet in the local newspaper of feral kids, pensioners starving to death, overcrowded kids homes full of pregnant schoolgirls etc. etc. they have to correct the situation but how? Cut elsewhere? Put the tax up? They will probably overcorrect the situation then be making social workers redundant in a few more years time. Can you see what I'm getting at? Multiply this by several "unpopular" departments, town hall bureaucracy for one, and there will be near anarchy for several years.

seven-day-weekend

PasturesNew wrote: »

Yes, stay in a house you bought for £3k, or move and retire to a house costing you £200k.

Got it in one!

BobProperty

seven-day-weekend wrote: »

So I would pay what for my UK home which we bought in 1976 for £3000?
At the moment it is around £900 pa Council Tax.

So about £30 plus indexation over 30 years. Problem is what the local authority has added to the rate over the 30 years.
What happened in one state (or more) was that the residents voted to limit the annual rise to 1%, so the most the local authority gets is 1% compounded from their 1970's purchase price. They ain't voting to change it. But the people who have paid $x00,000 for the house next door aren't happy.