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F T : Libdems Mansion Tax Proposal


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HOLA441

Sure, I agree with you, there are very good arguments for progressive systems.

The absurd is what we have now: a regressive system. The rate goes down for more expensive properties, and then - worse of all - are capped! (At the top Council Tax band.) Mansions pay a minuscule rate! That is just beyond the pale.

.

And lets not forget second homeowners get a discount! A tax concession that helps the rich and denies the poor access to more property.

Another nasty with the current council tax arrangement, is that it isnt the owner that pays, but those living in the property, that has to change too.

UK citizens should be able to obtain a modest property with low tax. If you want something bigger, which denies others access to that land, then it is only right that you pay more, much more for it.

There is a lot of lib-dem policies I dont like, but their proposed changes to taxing the land seem like a step in the right direction to me.

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HOLA442

And lets not forget second homeowners get a discount! A tax concession that helps the rich and denies the poor access to more property.

Another nasty with the current council tax arrangement, is that it isnt the owner that pays, but those living in the property, that has to change too.

UK citizens should be able to obtain a modest property with low tax. If you want something bigger, which denies others access to that land, then it is only right that you pay more, much more for it.

There is a lot of lib-dem policies I dont like, but their proposed changes to taxing the land seem like a step in the right direction to me.

Shifting tax from the occupier to the owner - what's to stop rents being adjusted accordingly?

The problem I have with LVT is that it goes against my principle that if you were managing to live (impossible in practice, admittedly) entirely self-contained then the government should have nothing they can touch you with. Unless there's a zero rate in there it forces you to be part of the system. Even a very low rate is not acceptable under those circumstances. I also worry that it could discourage redevelopment of derelict land, where the owner might prefer to put up with paying low tax on it than taking the risk of improving it but being unable to make use of that improvement (either by selling it or using it). It's also the same reason why I'm against things like jury service, having to fill in that stupid census, etc., but can accept (in principle if not always in detail) various taxes and so on.

I'd prefer more progressive taxing on properties, as opposed to land. Owning multiple properties is a bigger problem than owning a single large one. By scaling it by multiple properties it becomes less cost-effective to simply offload the tax on to the occupier.

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HOLA443

And lets not forget second homeowners get a discount! A tax concession that helps the rich and denies the poor access to more property.

Another nasty with the current council tax arrangement, is that it isnt the owner that pays, but those living in the property, that has to change too.

UK citizens should be able to obtain a modest property with low tax. If you want something bigger, which denies others access to that land, then it is only right that you pay more, much more for it.

There is a lot of lib-dem policies I dont like, but their proposed changes to taxing the land seem like a step in the right direction to me.

I agree.

In a previous post "wise eagle" suggested a type of property tax allowance, or threshold. I think that is a very good idea. I commented on it here: http://www.housepricecrash.co.uk/forum/index.php?showtopic=161912&view=findpost&p=2948587

It could even be kept simple. Like, instead of 1% over the total value, it could be tax free up to a threshold value, say 100,000, and 2% above that. :) Very fair!

And I agree with you that it should be on the "lump-sum" of all properties owned by an individual.

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HOLA444

Shifting tax from the occupier to the owner - what's to stop rents being adjusted accordingly?

Nowt.

How many people rent mansions though?

The problem with any ill-thought out tax is that it will end up having loopholes for the rich and stinging the poor.

So how to make it fair?

Who do you want paying most? Who do you want paying least?

If people in low grade accomodation are to pay least and people in mansions to pay most then you have to work out how you'll fit everyone else in and how you deal with empty and partly empty houses.

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HOLA445

Shifting tax from the occupier to the owner - what's to stop rents being adjusted accordingly?

Nothing. Of course collection will be far simpler, many people scarper without paying council tax, the costs of collection are considerable. You dont have that problem when it is levied against a property, cos if you dont get your money, you can seize the property, so people pay up.

The problem I have with LVT is that it goes against my principle that if you were managing to live (impossible in practice, admittedly) entirely self-contained then the government should have nothing they can touch you with.

The government will alway get its tax. Just a fact of life Im sorry to say.

Unless there's a zero rate in there it forces you to be part of the system.

Yes, you are part of the system. If you own land, the state defends it, both from external forces via the army, and your legal rights to use it. That doesnt pay for itself.

Even a very low rate is not acceptable under those circumstances. I also worry that it could discourage redevelopment of derelict land, where the owner might prefer to put up with paying low tax on it than taking the risk of improving it but being unable to make use of that improvement (either by selling it or using it). It's also the same reason why I'm against things like jury service, having to fill in that stupid census, etc., but can accept (in principle if not always in detail) various taxes and so on.

I'd prefer more progressive taxing on properties, as opposed to land. Owning multiple properties is a bigger problem than owning a single large one. By scaling it by multiple properties it becomes less cost-effective to simply offload the tax on to the occupier.

I think that the main burden would fall on properties not idle land. And progressive taxation is the right thing to do. And you are right, progressive tax really hammers landlords with multiple properties. The increased burden of tax would be theirs to bear, it couldnt be offloaded. They would do better to sell. Nothing wrong with that I trust?

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HOLA446

(...)

The problem with any ill-thought out tax is that it will end up having loopholes for the rich and stinging the poor.

(...)

Worse "loophole" than the current Council tax system, with an effective cap?! ( = the top band.) What can be worse than that?!

Sarah, sorry, but you are usually very rational, in all other issues, but here you are putting a huge amount of effort in finding red herrings. I don't get it. Sorry but it does sound like you - or someone close to you - have a vested interest in this. Perhaps someone asset rich but cash poor? Granny's large house in London perhaps? ;)

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HOLA447

Nothing. Of course collection will be far simpler, many people scarper without paying council tax, the costs of collection are considerable. You dont have that problem when it is levied against a property, cos if you dont get your money, you can seize the property, so people pay up.

And with regard to a thread yesterday, if it ain't registered, the gov get to seize the property to (you've got a year to do so),

Peter.

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HOLA448

Worse "loophole" than the current Council tax system, with an effective cap?! ( = the top band.) What can be worse than that?!

Sarah, sorry, but you are usually very rational, in all other issues, but here you are putting a huge amount of effort in finding red herrings. I don't get it. Sorry but it does sound like you - or someone close to you - have a vested interest in this. Perhaps someone asset rich but cash poor? Granny's large house in London perhaps? ;)

No I'm a realist.

The rich will loophole their way out of paying.

You could of course uncap council tax and reband everything that is currently a G into H,I,J,K,L,M,N,O,P,Q ....

Of course to make it fair you'd probably want to reband every house in the country which is a HUGE nulabour-esque style job of no use to the country at all.

I'd love to see a mansion tax that meant the UK creamed a nice fat percentage off all those uber-posh houses in London and around the country. But I just think you're very naive if you think any change they make won't end up stinging everyone on the ****.

PS: No one normally calls me rational so thanks ;-)

Edited by SarahBell
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HOLA449

No I'm a realist.

The rich will loophole their way out of paying.

You could of course uncap council tax and reband everything that is currently a G into H,I,J,K,L,M,N,O,P,Q ....

Of course to make it fair you'd probably want to reband every house in the country which is a HUGE nulabour-esque style job of no use to the country at all.

I'd love to see a mansion tax that meant the UK creamed a nice fat percentage off all those uber-posh houses in London and around the country. But I just think you're very naive if you think any change they make won't end up stinging everyone on the ****.

PS: No one normally calls me rational so thanks ;-)

We are not too far apart then. (I have to go now, sorry.)

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HOLA4410

Just more boring envy stuff.

An expensive house is not necessarily based on shedloads of land, and the person who owns it almost certainly bought it out of taxed income.

Typical garbage to try to fine people for doing well.

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HOLA4411

Nothing. Of course collection will be far simpler, many people scarper without paying council tax, the costs of collection are considerable. You dont have that problem when it is levied against a property, cos if you dont get your money, you can seize the property, so people pay up.

If it's simply about getting the tax then fair enough; I thought that you were suggesting that landlords should have to pay rather than tenants.

The government will alway get its tax. Just a fact of life Im sorry to say.

All too true, but that doesn't automatically equate to being acceptable.

Yes, you are part of the system. If you own land, the state defends it, both from external forces via the army, and your legal rights to use it. That doesnt pay for itself.

That's why it's a purely hypothetical starting point for analysing the acceptability of an idea.

I think that the main burden would fall on properties not idle land. And progressive taxation is the right thing to do. And you are right, progressive tax really hammers landlords with multiple properties. The increased burden of tax would be theirs to bear, it couldnt be offloaded. They would do better to sell. Nothing wrong with that I trust?

Nothing wrong at all. I prefer it more directly on number of properties rather than simply size (and value) of property and land because it would more easily force the offloading of someone wealthy owning large numbers of tiny flats somewhere cheap. A landlord owning and renting out one large mansion is arguably not causing as many problems to society as one owning and renting out several flats, even if the land area was the same and the total cost of the properties was the same.

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HOLA4412

No I'm a realist.

The rich will loophole their way out of paying.

You could of course uncap council tax and reband everything that is currently a G into H,I,J,K,L,M,N,O,P,Q ....

Of course to make it fair you'd probably want to reband every house in the country which is a HUGE nulabour-esque style job of no use to the country at all.

I'd love to see a mansion tax that meant the UK creamed a nice fat percentage off all those uber-posh houses in London and around the country. But I just think you're very naive if you think any change they make won't end up stinging everyone on the ****.

PS: No one normally calls me rational so thanks ;-)

Sarah,

a tax on land and property is almost impossible avoid or evade. The only way I can think of is selling your land.

I think it was the Atlee government that raised a lot of money off of the landed rich in this way, and was probably the only time in 1000 years that the landed rich have taken a real hit. They simply could not get around it and keep their land.

The best chance I guess of getting round this, is not to let it get into law in the first place. The labour victory in 1945 took everyone by surprise, and the landed rich were caught by surprise. They could be caught again, but they are very powerful.

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HOLA4413
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HOLA4414

Just more boring envy stuff.

An expensive house is not necessarily based on shedloads of land, and the person who owns it almost certainly bought it out of taxed income.

Typical garbage to try to fine people for doing well.

Not at all.

If a value linked council tax were introduced it would actually be better for rich people who want nice things in the long run.

See if you agree with my logic.

Rich people could avoid the tax almost completely by purchasing lower value properties which would incur no further cost than the council tax they already pay.

The net effect would be a softening of house prices (mainly at the higher end), and less speculation as there would be less to be gained from investing in property.

Many foreign nationals would likely sell their properties as it would make less economic sense to speculate, thus freeing up supply.

Leaving us with lower house prices, more supply and more stability in the market.

Although people who wish to purchase larger houses would pay relatively more tax, this would be some what off-set by the lower purchasing cost, plus the fact that the value of their house would still appreciate (on average) in line with inflation, which would likely still be the same or more than the cost of the tax.

The only downsides I can see are that there would be an initial increase in the cost of lower value properties as people attempt to streamline their tax exposure.

A move in tax weighting from productivity (income) towards property would disproportionately effect the lower earners in society (excluding those who don't pay council tax, but in that case there would simply be a bigger gap between receiving benefits and working).

Edited by libspero
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HOLA4415

Sarah,

a tax on land and property is almost impossible avoid or evade. The only way I can think of is selling your land.

I think it was the Atlee government that raised a lot of money off of the landed rich in this way, and was probably the only time in 1000 years that the landed rich have taken a real hit. They simply could not get around it and keep their land.

The best chance I guess of getting round this, is not to let it get into law in the first place. The labour victory in 1945 took everyone by surprise, and the landed rich were caught by surprise. They could be caught again, but they are very powerful.

So you don't think they'd just hide ownership? (Or would the law say that no proof of ownership shown within 6 months = land now owned by govt?)

Has the international legal situation got to be such that it could be avoided?

Thinking of the Philip Green stuff - whats to say it's his wife that doesn't own the land (for instance) and she's abroad. What powers would the govt need to get that tax?

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HOLA4416

Yes, I was suggesting that simple change too.

A progressive tax on land/property, payable by the registered owner.

But if the only actual difference you'd get is a more reliable collection of tax then it's not really a big point in this dicussion. It certainly wouldn't do anything to shift things against those holding lots of property and towards those who don't. In effect the tenant will still end up paying the tax, just via the landlord as a middleman. Is that really that much of an improvement?

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HOLA4417

Mine too.

In this small rented flat we pay around 1% of its value per year as Council Tax (band B ).

I can't see any logical or ethical reason for this same rate - 1%/year - not be applied to all properties.

.

Agree. That way it would reflect the ability to pay. In about 1975 Californian tax payers staged a revolt and reduced PT to 1.25% of the purchase price and no more than 1% of the total tax payable increase each year if house values justified it. It protects people who, through no fault of their own, see mega rises in property "values" yet see no rise in income to pay higher taxes.

The current council tax system is unfair as a decent 5 bedroom gaff worth a fraction of the 20 bedroom palace on Bishop's Drive. But are the VIs going to allow such a tax when they wopuld be shooting themselves in the foot as most MPs and their cronies live in such properties?

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HOLA4418

So you don't think they'd just hide ownership? (Or would the law say that no proof of ownership shown within 6 months = land now owned by govt?)

Has the international legal situation got to be such that it could be avoided?

Thinking of the Philip Green stuff - whats to say it's his wife that doesn't own the land (for instance) and she's abroad. What powers would the govt need to get that tax?

Sarah,

how can they hide ownership? It has to be registered with the Land Registry. If it isnt registered there, you dont own it. I guess that unowned land by default passes to the state, which is then for the state to do what it pleases with.

And I dont think international law applies to land issues. It is up to the nation state to govern the ownership of its lands.

As for owners abroad, well if you dont pay, you can have the land seized. It might be worth letting it go in some cases if the taxes are raised too high.

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HOLA4419

But if the only actual difference you'd get is a more reliable collection of tax then it's not really a big point in this dicussion. It certainly wouldn't do anything to shift things against those holding lots of property and towards those who don't. In effect the tenant will still end up paying the tax, just via the landlord as a middleman. Is that really that much of an improvement?

This was one of set of changes that would be made. Of itself it would be a useful change to make.

I think that the idea was that the property/landowner would become liable for taxes on the value of all their holdings, and that said tax would be progressive. One person owning a million pounds worth of property would then be paying tax at a much higher rate and therefore more in aggregate than ten people each owning £100k of property/land.

The idea here is to penalise the few that are rich enough to deny ownership by the many.

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HOLA4420

I have a more sensible proposal.

A reverse tax where people who live where houses are expensive pay a lower tax than those who live where houses are cheap.

For example, a flat in Islington that costs £450,000 would pay, say £600/year, while a terraced house in Grimbsby worth £100,000 would pay £1,200/year.

This would go some way towards offsetting the disgraceful situation we have now, where the Grimsby dweller has more disposable income but pays less tax than the person in Islington.

Surely we can all agree that this would be fairer?

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HOLA4421

I have a more sensible proposal.

A reverse tax where people who live where houses are expensive pay a lower tax than those who live where houses are cheap.

For example, a flat in Islington that costs £450,000 would pay, say £600/year, while a terraced house in Grimbsby worth £100,000 would pay £1,200/year.

This would go some way towards offsetting the disgraceful situation we have now, where the Grimsby dweller has more disposable income but pays less tax than the person in Islington.

Surely we can all agree that this would be fairer?

People,

Don%27t%2Bfeed%2Bthe%2Btroll.jpg

This "mightytharg" is just a disturbed and bitter b@stard.

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HOLA4422

Just more boring envy stuff.

An expensive house is not necessarily based on shedloads of land, and the person who owns it almost certainly bought it out of taxed income.

Typical garbage to try to fine people for doing well.

All taxes are based upon envy except income tax which definitely definitely isn't based upon envy.

And we all know that envy is wrong. So all those Libyans who envy colonel Gadhaffi, and any of the Russian's who envy Oleg Depripaska or Black South African's who envied white south Africans, all of these people were and are just nasty selfish individuals who deserve to stay poor and oppressed.

More seriously, and because your straw man is so quickly blown away, I agree that a house value tax is a stupid idea. There is nothing wrong with rich people buying flashy houses. It's the land which is imposing the costs on me, not the house.

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HOLA4423

All taxes are based upon envy except income tax which definitely definitely isn't based upon envy.

And we all know that envy is wrong. So all those Libyans who envy colonel Gadhaffi, and any of the Russian's who envy Oleg Depripaska or Black South African's who envied white south Africans, all of these people were and are just nasty selfish individuals who deserve to stay poor and oppressed.

More seriously, and because your straw man is so quickly blown away, I agree that a house value tax is a stupid idea. There is nothing wrong with rich people buying flashy houses. It's the land which is imposing the costs on me, not the house.

Envy is wrong, yes. That's why ancients defined it as a sin, because it leads only to negativity and bad things.

I didn't say the people who feel it are nasty or selfish - your strawman - but it is a damaging emotion.

Clearly if someone works hard and chooses instead of pi$$ing it up the wall to buy a really nice house it is purely foolish to declare that a % of that should be taken off them every year. It is just the product of failures wanting to see people brought down to their level to make them feel better.

Edited by bogbrush
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HOLA4424

Clearly if someone works hard and chooses instead of pi$$ing it up the wall to buy a really nice house it is purely foolish to declare that a % of that should be taken off them every year. It is just the product of failures wanting to see people brought down to their level to make them feel better.

Ok, how about an alternative..

Either people pay 1% of the value of their house in the form of council tax, or they may opt to pay no council tax at all, but instead forfeit any unearned gains in the value of the property when they sell?

That way they are neither "robbed" of their hard work, nor do they take free gain either.

By not speculating in property we could perhaps use the money we save (or existing capital) to invest in enterprise and productive assets which would benefit everyone?

Edited by libspero
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HOLA4425

Envy is wrong, yes. That's why ancients defined it as a sin, because it leads only to negativity and bad things.

I didn't say the people who feel it are nasty or selfish - your strawman - but it is a damaging emotion.

Clearly if someone works hard and chooses instead of pi$ing it up the wall to buy a really nice house it is purely foolish to declare that a % of that should be taken off them every year. It is just the product of failures wanting to see people brought down to their level to make them feel better.

A sin like greed you mean?

I completely disagree that there is anything particularly wrong with envy.

Envy is to justice as greed is to ambition.

Anyway, no, a LVT tax has nothing to do with envy. It is a system whereby people pay for the privileges granted to them by the state.

This is exactly why it mirrors the free-market solution (which I would prefer) whereby people pay society (individuals) for the privileges granted to them by society.

Opposition to LVT is special pleading by a special interest group who wish to be rewarded without actually contributing. In other words, their envy of the talented, clever and hard-working causes them to demand special treatment.

This is also, as far as I can tell, the main argument for an income tax, which you seem to prefer?

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