House prices rose 7.3% this year, average now almost £250k

[matt100]

I can understand that council tax needs more accurate. But yeah it's going to suck for some people that have lived there for years in an area that has become more expensive. But it has to be done at point. Council tax is based on 1991 prices. I mean it's been 30 years.

Does it? I mean there's a fine and sensible argument about the "value" of your house only being tangentially attached to your "worth" and your ability to pay taxes or your draw on services.

e.g elderly folks who through no fault of their own end up in a house that's "worth" loads due to property inflation when their income has nothing to do with it.

I don't honestly get why we have property taxes at all, surely it should be a mixture of income and wealth and wealth can be all sorts of things.

I guess if you try and make the system fair you create loopholes which are then exploited, for example I nearly got hit with double stamp duty due to owning a house with an ex when all I wanted was a roof over my head and had no chance of being a multiple property owner so I support heavily taxing multiple ownership but with caveats..

But if you created that caveat you'd have married people "separating" to avoid tax on a 2nd home.

My personal preference is a very steep inheritance tax. Perhaps because I stand to inherit very little I just don't get the logic in "passing down" wealth. Yes I suppose to some extent it encourages people to strive in their lives to pass something on but as soon as that's happened once the next generation only has a motivation to hoard.

 

[touch]

That would mean for example my council take going up by something like 5x per month lol.

You'd also need a way of constantly revaluing houses.. it's a total non starter.

I would pay less than half of my current council tax. I bought my house less than a year ago so my valuation is quite recent.

It seems like a tax based on the value of the house on a uk-wide scale would make housing even more unaffordable in the places where it's already expensive? Not only do you have high house prices but the council tax would be much bigger too. Mortgage affordability calculations would take that into account so you might end up needing a much bigger deposit.
It could work on a local level where each council can use a different percentage of the property value.

 

[matt100]

I would pay less than half of my current council tax. I bought my house less than a year ago so my valuation is quite recent.

It seems like a tax based on the value of the house on a uk-wide scale would make housing even more unaffordable in the places where it's already expensive? Not only do you have high house prices but the council tax would be much bigger too. Mortgage affordability calculations would take that into account so you might end up needing a much bigger deposit.
It could work on a local level where each council can use a different percentage of the property value.

I may be wrong but I don't think any revaluation has been done in forever so regardless of when you bought your house or even if it's just been built your council tax is based on some crackpot assumption of what it would have been worth relative to other houses in the 90s or something.

It's mental but any other way would be even worse, every time you moved YOUR tax would go up because you've crystallised the value by transacting but the neighbour who's never moved would be paying a fraction because their value has never been tested.

 

[dowie]

Does it? I mean there's a fine and sensible argument about the "value" of your house only being tangentially attached to your "worth" and your ability to pay taxes or your draw on services.

e.g elderly folks who through no fault of their own end up in a house that's "worth" loads due to property inflation when their income has nothing to do with it.

I don't honestly get why we have property taxes at all, surely it should be a mixture of income and wealth and wealth can be all sorts of things.

[...]

My personal preference is a very steep inheritance tax. Perhaps because I stand to inherit very little I just don't get the logic in "passing down" wealth. Yes I suppose to some extent it encourages people to strive in their lives to pass something on but as soon as that's happened once the next generation only has a motivation to hoard.

I agree frankly a poll tax (with exemptions for people without an income) or perhaps a flat charge per adult in the household or perhaps a local income tax with a cap would be better to pay for local services.

Assets should be taxed when they're transferred and/or applied to any gain. Income is what should be taxed on an ongoing basis.

And yes IHT could be ramped up + trusts set up to benefit private individuals across generations or some line of male heirs should simply be scrapped or given a limited lifespan of like one generation (i.e. someone putting aside something for their kids to be given an ongoing income etc..) - they shouldn't be vehicles for large estates to be ring-fenced and passed down multiple generations. the idea that one person should personally benefit from the ownership of say a big chunk of Central London and so should all his firstborn male heirs is flawed. If they had to pay 50% tax on that estate (worth the vast majority of their net worth) then parts of it surely need to be sold off and/or mortgaged to pay the bill.

 

[dowie]

I may be wrong but I don't think any revaluation has been done in forever so regardless of when you bought your house or even if it's just been built your council tax is based on some crackpot assumption of what it would have been worth relative to other houses in the 90s or something.

It's mental but any other way would be even worse, every time you moved YOUR tax would go up because you've crystallised the value by transacting but the neighbour who's never moved would be paying a fraction because their value has never been tested.

That doesn't make any sense - you don't get away with less tax just because you've not bought the house recently in systems where the current market value is relevant.

The first point isn't too relevant either - council tax still increases, the only thing that isn't really updated is the relative differences between the properties - supposing property that wasn't too much more expensive in the 90s actually has increased significantly etc.. but that becomes a bit moot as you'd generally expect everywhere in a given area to have increased if that is the case and different boroughs charge different rates anyway.

 

[badbiddy]

But then they just sell them off again. Like they have done twice now :/

The council doesn't want

I agree frankly a poll tax (with exemptions for people without an income) or perhaps a flat charge per adult in the household or perhaps a local income tax with a cap would be better to pay for local services.

Assets should be taxed when they're transferred and/or applied to any gain. Income is what should be taxed on an ongoing basis.

And yes IHT could be ramped up + trusts set up to benefit private individuals across generations or some line of male heirs should simply be scrapped or given a limited lifespan of like one generation (i.e. someone putting aside something for their kids to be given an ongoing income etc..) - they shouldn't be vehicles for large estates to be ring-fenced and passed down multiple generations. the idea that one person should personally benefit from the ownership of say a big chunk of Central London and so should all his firstborn male heirs is flawed. If they had to pay 50% tax on that estate (worth the vast majority of their net worth) then parts of it surely need to be sold off and/or mortgaged to pay the bill.

It might be flawed, but it's not as flawed as your idea.
If you can't pass what you work for down to your kids, then what's the point in striving for anything?
As someone that uses Overclockers, I'd guess you like your technology. And guess what you're describing, a socialist state. Guess what type of state has never contributed to the development of new technology. Got it in one, socialist states.

 

[dowie]

It might be flawed, but it's not as flawed as your idea.
If you can't pass what you work for down to your kids, then what's the point in striving for anything?
As someone that uses Overclockers, I'd guess you like your technology. And guess what you're describing, a socialist state. Guess what type of state has never contributed to the development of new technology. Got it in one, socialist states.

WTF are you talking about?

Abolishing trusts or time limiting them doesn't stop you from passing on assets nor is it socialism.

Care to rethink your argument here at all as it's just flat out wrong? I don't care if you agree with me or not but at least try to think about what you're saying.

The weird tangent about technology is flawed too - I mean the US has at least some rules against perpetual trusts yet look at where the biggest tech companies were founded... and various founders there have pledge to give away most of their wealth anyway.

 

[badbiddy]

WTF are you talking about?

Abolishing trusts or time limiting them doesn't stop you from passing on assets nor is it socialism.

Care to rethink your argument here at all as it's just flat out wrong? I don't care if you agree with me or not but at least try to think about what you're saying.

The weird tangent about technology is flawed too - I mean the US has at least some rules against perpetual trusts yet look at where the biggest tech companies were founded... and various founders there have pledge to give away most of their wealth anyway.

The only way your response here makes sense to me is if I misread your argument.

Are you, or aren't you, advocating seizing of assets above a threshold by the state?

 

[Scam]

There was a piece news a week or so ago that Sunak was considering plans to get rid of SDLT and council tax completely in the March budget and replace them with an annual property tax.

That's interesting. Stamp duty payable by a buyer is ridiculous. The best idea I've seen for a fair property tax is to take a percentage of the difference of the sale price compared to the last sale price. In other words, the owners capital profit. Like I've mentioned many a time it's crazy that we have bricks and mortar in this country earning more than the average salaries for that area. Just tax it. Those people who were lucky enough to buy a property in an area that becomes gentrified/expensive will still get a profit, just not a life-changing/lottery-winning profit that they've done nothing to deserve. Even a tiny percentage would work.

Also massively regressive, you'd have people being forced out of areas through gentrification because they couldn't afford the property tax despite the fact they'd perhaps lived there for generations.

Isn't the percentage of people renting in this country now approaching (or recently hit) 50% of the population? So this already happens to half the population anyway by way of their landlords increasing their rent, or kicking them out if they dont want to pay it. Two wrongs dont make a right, but.. just sayin'

 

[jaybee]

There was a piece news a week or so ago that Sunak was considering plans to get rid of SDLT and council tax completely in the March budget and replace them with an annual property tax.

https://www.thetimes.co.uk/article/rishi-sunak-eyes-tax-rises-in-march-budget-gmd3qpmkb

A 0.48% annual property tax would raise the same money as SDLT and council tax do now, and this was planned to be a tax rise, so probably more than that. Hopefully at least 1 or 1.5% per year, although my preference would be above 2%.

Obviously we wouldn't know until announced. if a 0.48% property tax is implemented, the average person outside London will save money, the average person in London will have to pay a little more.

A little more?
2% annual property tax is literally mental numbers. Would never be allowed to happen. Some people's council tax would rise 5-10 times over night in London. Yes London is not the whole country but I'm just saying it holds significant importance as ever with these things.
0.48% for me - just worked it out - is more than 20% rise as it is. I don't live in London but am in the South East.

 

[touch]

advocating seizing of assets above a threshold by the state?

That's called "tax"?

 

[matt100]

It might be flawed, but it's not as flawed as your idea.
If you can't pass what you work for down to your kids, then what's the point in striving for anything?
As someone that uses Overclockers, I'd guess you like your technology. And guess what you're describing, a socialist state. Guess what type of state has never contributed to the development of new technology. Got it in one, socialist states.

Lol.. of course you can prove your argument is flawless because as we all know childless people are all feckless idlers.

Furthermore those who have inherited decent amounts always go on to strive and work hard, I believe they've made a program about them right? Made to work in Chelsea?

Honestly...

 

[badbiddy]

Lol.. of course you can prove your argument is flawless because as we all know childless people are all feckless idlers.

Furthermore those who have inherited decent amounts always go on to strive and work hard, I believe they've made a program about them right? Made to work in Chelsea?

Honestly...

My argument? No of course it's not flawless. There's many reasons you'd want to levy heavy taxes on people, homelessness would be my number 1 thing to eliminate "at any cost". The problem, my charming sir, is that most problems that exist today in society aren't obviously solved by any means at all, are usually the by product of another well meaning policy, and are not easily solved at all. And heavily "taxing" people usually results in either fight (loopholes) or flight (evacuation of said assets to another land).
"Meddle at your peril" or something like that.

 

[dowie]

The only way your response here makes sense to me is if I misread your argument.

Are you, or aren't you, advocating seizing of assets above a threshold by the state?

You mean taxation right? Are you seriously proposing we don't pay any tax?

Paying tax is socialism in your mind?

Yes, I think you're very confused here....

 

[matt100]

My argument? No of course it's not flawless. There's many reasons you'd want to levy heavy taxes on people, homelessness would be my number 1 thing to eliminate "at any cost". The problem, my charming sir, is that most problems that exist today in society aren't obviously solved by any means at all, are usually the by product of another well meaning policy, and are not easily solved at all. And heavily "taxing" people usually results in either fight (loopholes) or flight (evacuation of said assets to another land).
"Meddle at your peril" or something like that.

Funny you jumped straight to socialism like it's your ideological hobby horse.

I can tell you where I and most of my peers get our striving instinct from and it's from having to look after ourselves and having no safety net from inheritance. Nothing to do with handing things down, that's just a bizarre side effect that drives some pretty toxic societal effects.

 

[badbiddy]

Funny you jumped straight to socialism like it's your ideological hobby horse.

I can tell you where I and most of my peers get our striving instinct from and it's from having to look after ourselves and having no safety net from inheritance. Nothing to do with handing things down, that's just a bizarre side effect that drives some pretty toxic societal effects.

Where I find it funny you assume I stand to inherit anything based on that post. I have handed up more than I stand to receive when my parents pass away (bless their souls and obviously I don't mean I've handed up more than they've given me already - like a roof over my head and many years of meals, clothes and lessons)

 

[HACO]

That would mean for example my council take going up by something like 5x per month lol.

You'd also need a way of constantly revaluing houses.. it's a total non starter.

Also massively regressive, you'd have people being forced out of areas through gentrification because they couldn't afford the property tax despite the fact they'd perhaps lived there for generations.

If it was basically replacing council tax then I guess fine and it can start to diverge but it's no panacea.

If implemented, I'm sure it will have provisions to make sure that people won't be forced to sell, e.g. postponing tax at no interest until sale/probate. Most wealth/property taxes implemented globally have such provisions. Even still, borrowing against a £400k property to pay £2000 a year will be effectively interest free anyway.

I can understand that council tax needs more accurate. But yeah it's going to suck for some people that have lived there for years in an area that has become more expensive. But it has to be done at point. Council tax is based on 1991 prices. I mean it's been 30 years.

Yeah, it totally needs reassessing.

That's interesting. Stamp duty payable by a buyer is ridiculous. The best idea I've seen for a fair property tax is to take a percentage of the difference of the sale price compared to the last sale price. In other words, the owners capital profit. Like I've mentioned many a time it's crazy that we have bricks and mortar in this country earning more than the average salaries for that area. Just tax it. Those people who were lucky enough to buy a property in an area that becomes gentrified/expensive will still get a profit, just not a life-changing/lottery-winning profit that they've done nothing to deserve. Even a tiny percentage would work.

Yeah. That's capital gains tax which is already in the tax code. Currently your home is exempt. It shouldn't be, or at least the exemption should have a cap (e.g. only properties sold at below median price - £250k - are exempt). Or something like that.

Isn't the percentage of people renting in this country now approaching (or recently hit) 50% of the population? So this already happens to half the population anyway by way of their landlords increasing their rent, or kicking them out if they dont want to pay it. Two wrongs dont make a right, but.. just sayin'

I think we're at 60:40 own:rent ratio right now, down massively in the last 20 years.

Landlords are already charging the highest rent they can charge in any market. If there was scope to increase rent, they'd have already done it. They may try to use it as an excuse to ask tenants to pay more, but tenants must resist. Ideally this should be coupled with rent control but that won't happen.

A little more?
2% annual property tax is literally mental numbers. Would never be allowed to happen. Some people's council tax would rise 5-10 times over night in London. Yes London is not the whole country but I'm just saying it holds significant importance as ever with these things.
0.48% for me - just worked it out - is more than 20% rise as it is. I don't live in London but am in the South East.

Yeah, 2% is my hope and wishful thinking. 0.48% will raise as much as council tax + SDLT, so assuming this is a tax increase, then it will be somewhere between 0.75 and 1%.

 

[touch]

Yeah, 2% is my hope and wishful thinking.

That seems a bit pointless to me. It'll allow renters to save a lot more buy home ownership becomes so expensive that mortgage affordability is much lower and they'd need to save a much bigger deposit anyway. Or is the idea that renting becomes cheaper and people will choose to rent permanently rather than buy a home?

*Pointless in terms of your situation and others similar, in that it won't make home ownership any easier. I guess it would generate more tax overall than council tax, so that would be a benefit.

 

[HACO]

That seems a bit pointless to me. It'll allow renters to save a lot more buy home ownership becomes so expensive that mortgage affordability is much lower and they'd need to save a much bigger deposit anyway. Or is the idea that renting becomes cheaper and people will choose to rent permanently rather than buy a home?

*Pointless in terms of your situation and others similar, in that it won't make home ownership any easier. I guess it would generate more tax overall than council tax, so that would be a benefit.

It won't help people buying in the immediate future like me, as you say it may even make it more difficult, but property taxes (similar to higher interest rates) will have a downwards pressure on the asset prices in the long term, e.g. a 300k house will be 400k in 15 years instead of 800k. Helping people who want to buy in future decades and generations.

 

[touch]

Ok, I understand your point. Maybe a good compromise would be the 0.48% for 1 property and the 2% on each additional property. Then you might get a balance between suppressing price increases but also allowing people affordability on a mortgage to buy if they want to.