Council tax is illegal!

[SueEllen]

People seem generally opposed to changing the system but I assume this is not that they think it's a good system, but that they assume any new system will be more expensive as a chance for stealth tax increases.

Local income taxes instead of property tax could be an option. Of course that removes an opportunity to tax rich retired people. Should the government/council do mandatory house valuations every couple of years?!

They can do it like house valuations.

So they band people's homes like now. Then do a drive by house valuation every 5 or so years. Then increase the value of homes in the band and the property tax as a percentage will naturally adjust accordingly.

It will help encourage people move out of homes too big for them.

[ladymuck]

Or do it based on the size of the property according to land registry data? Determine a rate per square metre and apply that to each property.

[vetran]

[QUOTE=SueEllen;n4216792]

They can do it like house valuations.

So they band people's homes like now. Then do a drive by house valuation every 5 or so years. Then increase the value of homes in the band and the property tax as a percentage will naturally adjust accordingly.

It will help encourage people move out of homes too big for them.[/QUOTE]

yeah because people buying stuff with their own money is so bourgeoise.

There are a number of organisations that will provide you with fairly reliable pricing for most housing based on sales and other stats. Zoopla being one.

[d000hg]

They can do it like house valuations.

So they band people's homes like now. Then do a drive by house valuation every 5 or so years. Then increase the value of homes in the band and the property tax as a percentage will naturally adjust accordingly.

It will help encourage people move out of homes too big for them.

So my tax is based on someone driving past making a casual valuation? How do I know this valuation is reasonable?

[d000hg]

yeah because people buying stuff with their own money is so bourgeoise.

That's the point, most people don't buy houses with their own money.

[NotAllThere]

Local income taxes instead of property tax could be an option. Of course that removes an opportunity to tax rich retired people.

Not if you have a wealth tax alongside!

[d000hg]

Not if you have a wealth tax alongside!

People often talk about how the rich should pay a little more as their "fair share". I think this could be achieved with a new taxation tax. However much you pay in tax, you get taxed 10% on.

[Protagoras]

I do think that council tax is one of the most unfair taxes, since it's not related to ability to pay, and there's no adjustment a person can make to mitigate it beyond moving house. Property 'value' is not a good proxy for ability to pay. The rentier economy, for example, has people living in houses that they could not afford to purchase while taxed relative the the 'value' of the accommodation.

A council provides services. One pays for the services irrespective of use as a social good. It would make more sense to levy a per-capita charge, such as a local income tax, with ability to pay is taken into account.

As for those with unearned property wealth (e.g. the rich pensioner debate), a capital gains tax on residential property sales / transfers or a reduction in IHT allowances could deal with that, although this would not be popular.

P.S. I want more space, so I will be moving house. I am in a small flat built in the early 90s. The three-bedroom houses I am typically looking at locally are over double the price, but one or two council tax bands lower having been built in the 80s or earlier.

[d000hg]

Another quirk of Council Tax being based on banding of the house not valuation is that people in more expensive areas pay proportionately less.

My ~500k house in County Durham is in band G because round here, that's historically a very expensive house. That runs me £3600 a year since Durham is about the 5th most expensive area for council tax. In Chelsea, band G costs £2200 but I assume a band G house would be £1m plus. Round here, you pay £130pcm for a £70k house.

Not sure what that really means but it suggests changing council tax to use bands based on actual valuations would be rather complex.

[SueEllen]

So my tax is based on someone driving past making a casual valuation? How do I know this valuation is reasonable?

That's one way they do mortgage valuations.