Would be pretty great if we get that.
House prices rose 7.3% this year, average now almost £250k
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Would be pretty great if we get that.
Surprisingly the US has property taxes, average is about 1% but can be as high as 2%. Rent and house prices are just as unaffordable here (In NY at least) as they are in London
The original article you linked is behind a paywall, is this a tax that would be paid by owners or occupiers?
i was going to mention this, all the people complaining about property taxes as if it some kind of socialist deviation. should realise that even the nost purely capitalist countries employ property and wealth taxes.
The goal is not purely to reduce house prices, but it does supress pruces a little. The primary goal is tax revenue, and as such it is highly successful because it is both strongly progressive and promotes free-market efficiency.
If you can afford the mortgage and running costs of a more expensive house, then you can afford more taxes. This is very different to taxes like VAT where both a millionaire and someone on the poverty line pay the same VAT on the same item.
Moreover, it promotes efficiency in the economy. Many taxes like VAT and Income tax have negative effects as it scales: people buy less or cheaper goods due to VAT; at higher IT levels peole are less inclined to to pursue pay rises or work overtime. However with a property tax, the consequences are positive because people will seek to purchase a house of the right size rather than bigger than they need, freeing up housing supply and pushing smaller houses that better fit requirements than have extra bedrooms as a bragging right. Moreover, 2nd home ownership is reduced or when people do own 2nf properties there is an incentive to make financial use of the property rahjer thsn sitting doing nothing. People will rent them out periodically, or simply list them AirBnB etc, makiing the property contribute to GDP.
It has other interesting side effects. For example, there is an incentive to buy housing in a cheaper neighborhood. This stops the poorer neighborhoods spiralling downwards in to declapitation while the most expensive end up ever more expensive and unreachable. Then of course it moves the cost of council taxes from renters to landlords which better reflects the capital wealth
owners of the property
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So a home owner pays £x towards the cost of local services and a tenant pays nothing?
Suppose I was a landlord with a £150k property let at £750/month. @HACO suggests I should pay up to £3,000/annum for this new tax, isn't this just going to be added to the rent? This would mean a tenant was contributing towards local services but possibly at a higher level than a home owner.
A social landlord with 1,000 £150k properties. Are they going to have to pay up to £3m/annum?
Soldato
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And that’s the misconception, one way or another it’s passed onto the occupier .
Take the letting agent tenant fee introduced recently- https://www.gov.uk/government/collections/tenant-fees-act. Passed onto the landlord and then passed straight back to the Tennant in rent increases .
Stamp duty - ok this will be controversial , I think it stinks . Due to the cost of it it stops people from moving and thus a shortage of property is actually on the market - proof in point is the current stamp duty exemption that has stimulated the market like it’s the mid 80’s again .
House market is broken in many different ways but taxing the life out of it is not the solution. Mine would simply be to build build build until there is a ready supply , something the government will not do and I can’t get my head around , it’s not as though we don’t have enough space .
Exactly what I would do.
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The tenent wont pay property tax because they don't own the property.
The property tax ideally should be at a national level. The funding of local services should ideally be done from central taxation as a primary means, but csn be supplimented with a local income tax. This is again common, even in the US. This has the advantage that it is progessive and directly linked tp the ability to pay taxes rather than the arbitrary cost of a property you might don't even own. A local tax of 2-5% of income is common.
Yes absolutely someone with 1000 properties sjould be paying £3m in taxes. They then have the incentive to make sure their property portfolio is well managed and efficient, with high quality desiresble properties nad not turfing out renters on a whim.
Rental cost should also be subject to rental control, with prices indexed to the property value. Since property taxes and rental rates are both linked to the same property value, then there isn't really much of an issue. Under rental control, rent prices should only increase in line with inflation. This will pressure property prices to also maintain equilibrium with inflation. This also has the nice advantage that rental prices can actually go down when the economy is in a poor state and inflation is low or negative. When i was last renting I had a 200CHF reduction in rent which helped counter act the lack of payrise due to difficulty financial climate.
It's because we've managed to turn houses into wealth so nobody wants to lose out.
Obviously particularly the tories understand capitalism and the fundamental underpinnings of that are supply and demand and that's what's out of kilter but if they correct it they lose money, many of their voters lose money more insidiously lose the prospect of gaining money if only they can join the gravy train.
It's why you get people on minimum wage complaining about wage rises or benefits because rags like the sun tell them it's socialism and socialism is bad.
Myself personally having learned a painful lesson in this by getting wound up in the 00s self cert mortgage and credit boom I now try my best not to talk about what a house is "worth" or "adding value" because it's just total nonsense, wooden dollars at best. I'd be perfectly happy if we found a way to stagnate house prices indefinitely and I agree that is to create an oversupply.
A crash is no good for most either, yes if you want to buy a house it might make it cheaper but if we have a crash we likely have a depression and you might lose your job which would impact your house buying chance far more than a reduction in price.
It's a generational system issue which is going to take more than a 5 year government cycle to think your way out of, so basically it's never going to happen because short term votes trump long term societal good.
Caporegime
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Build houses where?
There is no point building houses 300 miles away if haco needs a house in the centre of London.
Building houses won't affect house prices. Because those houses won't be wanted by anyone other than those in the local area.
It's not as if everyone in London is going to start buying houses in Wales. Therefore London prices remain the same.
The real solution is fixing the wage issue. To fix that you need to fix the economy. To fix the economy you need a long standing competent government.
Owners.
Well, 2% was my idea, the number thrown around seemed to be around 0.5%, so £750 per year for a £150k property, lower than the current council tax in most places.
As for whether you would have passed this to the renter, if the you could have charged your renter an extra £3k/year, you'd already be doing that. Maybe if the tenant no longer needs to pay council tax you can charge them an extra amount equal to the council tax, either way the tenant is no worse off. Realistically though, some of that will be passed to the renter, and the landlord will have to take some of it, depending on the local market.
Generally speaking though, someone currently paying £1500pcm in London for a 2-bed flat that's worth £750k would not be getting a £350pcm rent increase as a result of this. Most of that cost will be absorbed by the landlord.
Yeah, someone with a net worth of at least £150 million net worth shouldn't be having problems paying a £750k property tax (@0.5%) every year. Hell, they can easily afford to pay a 5% tax every year.
Sure, building in Wales doesn't affect London pricing, it affects Wales pricing. Building in and around London affects London pricing. It's not that hard to grasp, my friend.
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Caporegime
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You can't realistically build any more in London.
Not unless you are knocking something down and building multiple homes upwards on it.
Otherwise you have to ask why they haven't built there already.
London is overbuilt and overpopulated as it stands.
You can if you build taller. Like Tokyo, Seoul, Shanghai, Bangkok, Hong Kong, New York, Singapore, etc...
London is comparable to those cities, yet we don't build anywhere near as tall. London barely makes the top 50 in the world in terms of average building height. I'd say we can go A LOT taller than it is now.
England is overpopulated, no arguments, but unless you suggest genocide or forced displacements we need a way to house our population where they want to live. Building taller works well, as we've seen in comparable cities around the world.
Caporegime
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The problem with building taller is where do you park all the cars? It brings its own issues.
Bringing more population into a smaller area will increase pollution, fumes, smoke and reduce what little greenery there is.
It's also a solution I mentioned in my post if you go back and read it. So your post was pointless.
We need to get away from the "everyone needs to own a car" culture, car ownership in London isn't all that high (56% of households, versus 80% countrywide), those numbers are even lower for younger people, despite the stereotype among boomers that millennial are poor because they all drive BMWs, lol. And you don't see this as a problem in the cities I mentioned. Not everyone needs to own a personal car in big cities with good public transport.
Soldato
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That’s presuming that good public transport links exist between where you are and where you want to be. The other consideration is how long public transport takes to get somewhere if you have to change buses/tube lines. I can think of a dozen retail parks I used to visit that were 5-10 minutes in my car that would take an hour to reach by bus/tube and then I’d be limited to what I could carry on the return trip. Good luck transporting a family’s weekly shop on the bus or the tube.
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We need better public transport and I would also make large buildings in cities have underground parking. But it is expensive obviously. I would like to see subsidised parking once cars are electric but not self driving.
We need capacity which means electric trains and electric cars is what we should be planning for.
We need capacity which means electric trains and electric cars is what we should be planning for.
Also holidays, if we want to re-introduce holidays in the UK rather than abroad then the need for cars will increase not decrease.
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I dont think most people want to reintroduce holidays to the UK. Put funding into making flight green.
Caporegime
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So are you going to just do shopping online then?
You may as well just convert all retail space into homes then because the majority of stuff requires a vehicle to bring it home unless you want to do daily trips and bring what you can carry at a time.
Especially if you have kids, etc.
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