Any of you have property in Ireland? This should concern you.

[Rare Bear]

On 15/03/2022 at 08:56, Frank Hovis said:

 

I wouldn't say illegal; I would rather say expensive.

Council tax is steadily moving from the idea of paying for services that you use into a property tax than can be used to affect how property is used.

Now some of this I am cheering - the removal of second home discount and the ability in Wales to charge 400% of the council tax upon a second home.

However I know that the shift that I am cheering is going to come back and bite me; as if CT is now an explicit property tax then why would you have a single person discount?  That will go.

The easy win is then "mansion tax" - all CT starts as a set percentage of the home's value without a cap.

And with that done you are then potentially going down the same road as Housing Benefit, which paid the rent of the house you are in, turning into LHA which pays the rent of the house that you should be in by your household size.  If you have extra rooms meaning more rent then you are paying that yourself.

Map that back onto Council Tax and then the standard, lowest, Council Tax Rate in any band is only available for those homes where the household size matches the house size.  Under-occupancy will attract a premium on CT.

This is going to be a long slow process but to guess a timeline:

• Punitive council tax allowed on second homes in England: 2025
• "Mansion tax" / falt percentage tax comes in: 2030
• Single occupant discount withdrawn: 2035
• Premiums for under-occupancy: 2040

 

Overall though, unless ridiculous premums are applied, I don't actually see that as a bad thing even though it will cost me more.  You already need to be seriously wealthy in many areas to buy a big home so why shouldn't that come with additional tax liability?

Maybe because you will have paid a serious amount of tax already on the money you've paid to buy the home? You can't really buy a home with dodgy money. Unless you're a Russian or a politician of course.

[Frank Hovis]

29 minutes ago, Rare Bear said:

Maybe because you will have paid a serious amount of tax already on the money you've paid to buy the home? You can't really buy a home with dodgy money. Unless you're a Russian or a politician of course.

 

I don't see why that should matter.

If I buy a Bugatti Veryon it will cost me a lot but I also know that road tax, insurance and so on will be much higher than for an average car.

Expensive assets generally have high costs attaching; for a big house it's maintenance, heating, so why should council tax be the exception that stays cheap when all other costs are high?

And if you don't like the high costs then you can either sell it or not buy it in the first place; it is the asset that brings the tax liability - nobody is selecting a particular indivdiual to tax punitively.

[Rare Bear]

On 19/03/2022 at 19:26, Frank Hovis said:

 

If you work out the current council tax take vs total property value in the UK it actually works out that half a precent of property values would bring in the same return.

And that's entirely fair; nobody is penalising those with big homes.

It is such an obvious way of replacing an unfair property tax system that it escapes me as to why it hasn't already happened.

But how often do you revalue all the property in the country?

[Rare Bear]

4 minutes ago, Frank Hovis said:

 

I don't see why that should matter.

If I buy a Bugatti Veryon it will cost me a lot but I also know that road tax, insurance and so on will be much higher than for an average car.

Expensive assets generally have high costs attaching; for a big house it's maintenance, heating, so why should council tax be the exception that stays cheap when all other costs are high?

And if you don't like the high costs then you can either sell it or not buy it in the first place; it is the asset that brings the tax liability - nobody is selecting a particular indivdiual to tax punitively.

The other costs are for your benefit. The tax is more likely to be used to reduce your standard if living than to enhance it.

[Frank Hovis]

2 minutes ago, Rare Bear said:

But how often do you revalue all the property in the country?

 

Every twenty years for a detailed valuation and then use Savills or similar indices for the annual uplift as these are by area.

Indidvidual houses are flagged for revaluation if building work is done such as adding extensions; this happens now and you can see the flags on your council website. 

[Rare Bear]

To get back on topic, don't quite a few of the Northern Ireland Sinn Fein MPs have holiday homes in the South? I'm pretty certain the one-who-was-never-in-the-IRA definitely has or had one and the one who died a few years back did.

[Frank Hovis]

3 minutes ago, Rare Bear said:

The other costs are for your benefit. The tax is more likely to be used to reduce your standard if living than to enhance it.

Tax is rarely for your personal benefit; if that was the aim then they wouldn't tax you but allow you to buy the services that you want from the council.