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Land Tax - And Uk Property Value

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Does anyone know what the total value of all UK residential property is? Are stats collected on such things?

I ask as apparently HMRC collected £153bn last year in income tax and I'm curious as to what percentage tax rate would have to be charged as a property/land tax to completely offset this.

(HMRC data: http://www.hmrc.gov.uk/stats/tax_receipts/tax-nic-receipts-info-analysis.pdf - see page 5)

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Does anyone know what the total value of all UK residential property is? Are stats collected on such things?

I ask as apparently HMRC collected £153bn last year in income tax and I'm curious as to what percentage tax rate would have to be charged as a property/land tax to completely offset this.

(HMRC data: http://www.hmrc.gov.uk/stats/tax_receipts/tax-nic-receipts-info-analysis.pdf - see page 5)

How many homes are there? What's the mean price?

Multiply those and you get a ballpark estimate.

£153bn might be in the ballpark of 5% of UK residential property, but if you were to charge 5% then the value would fall considerably as it became a less financially-attractive asset. It's pretty-much what's happened in parts of the US.

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Forgive me replying to my own thread but a very rough guess is as follows.

Google tells me that in 2009 the population of the UK was 61.838m

In 2002 there were apparently an average of 2.31 residents per property.

The average property value in the UK is currently £163k (land registery figures, this site)

So the value of UK property is (61838000 / 2.31) * £163k = £4363460606060 i.e £4.3 trillion.

Therefore £43bn could be raised with a 1% property tax and a 4% annual tax could completely remove the need for income tax.

Personally I'd favour a 1% land tax with a £15k annual allowance for all and a fixed rate of whatever (can't be more than 25%) above that.

Edit: Thanks porca misèria, great minds as they say.

Edited by Voice of Reason

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It might make sense on paper, and the realities that we've got can easily be argued to be even worse, but I don't like the idea of any tax that you'd have to pay simply for existing in this country. If you lived in complete self-sufficiency, without anyone else ever seeing you or anything that you do, then no law or tax should touch you - you should be as irrelevent to them as they are to you. About the only justifiable exception to that would be to stop you spending your time torturing animals. A land value tax fails that principle - probably (I suppose if it were possible to find somewhere where you could live like that the land would have a value of zero and hence no tax anyway).

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Personally I'd favour a 1% land tax with a £15k annual allowance for all and a fixed rate of whatever (can't be more than 25%) above that.

So the old lady with a pittance of a pension, who's lived in the same house all her life, now has a whacking annual tax bill of 1% of the value of her house, all because of liar loans inflating its value?

Whilst the investment banker who rents his flat in Canary Wharf now pays 25% tax on his bonus instead of 40% or 50%?

Devil's Advocat says this tax has some flaws.

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So the old lady with a pittance of a pension, who's lived in the same house all her life, now has a whacking annual tax bill of 1% of the value of her house, all because of liar loans inflating its value?

Whilst the investment banker who rents his flat in Canary Wharf now pays 25% tax on his bonus instead of 40% or 50%?

Devil's Advocat says this tax has some flaws.

Winston Churchill 1909

http://www.wealthandwant.com/docs/Churchill_LPCP.html

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If you tax something you get less of it & if you subside something you get more of it.

A land tax would mean land is used more efficiently. That in itself would result in lower land prices.

The average persons per house would increase.

Rents & prices would crash (largely as a result of people living more densely)

Overall it would be a huge transfer of wealth from the v.rich to the working poor and middle.

A good thing overall in the UK as the balance is wrong

A 2 to 4% land tax would be good but I would remove council tax instead & increase the tax free allowance

BTW business rates is a land tax for businesses in all but name.

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So the old lady with a pittance of a pension, who's lived in the same house all her life, now has a whacking annual tax bill of 1% of the value of her house, all because of liar loans inflating its value?

Whilst the investment banker who rents his flat in Canary Wharf now pays 25% tax on his bonus instead of 40% or 50%?

Devil's Advocat says this tax has some flaws.

She would have paid a lot less for her 50 working years in income taxes & importantly she or at least her grand kids wouldn't have to pay 6x income for a house but could get it for 3x

& Ofcourse you cant get blood from a stone. Poor old people don't pay shit to the state but get a lot thrown their way.

& this 'paid x y z into the system for many a year....' don't wash. Their government didn't save jack shit but spent it in them on their watch. Had they saved into the system & this generation spanked it away you may have a leg to balance on.

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As a new tax it would probably work as long as it could be structured so as to comply with the two basic laws of new taxes, which are that it must screw the poor and average young while being kind to the wealthy elderly as well as there being some special deal whereby the Scots can be exempt from paying anything. ( the university charging regimen is a perfect example of these rules in action )

In order to meet these criteria I would say that the best way a government could launch it is to start off low and offer some sort of saving in exchange , so I would imagine a .5% a year tax on the sales price for all new English transactions with maybe 1% for property above 1 million ( so clegg gets his mansion tax ) , in exchange for getting rid of stamp duty . Thus people in existing property don't pay anything and stamp duty is turned into a taxation every year which will raise much more money in the long run. being a form of stamp duty all the infrastructure is in place already too so no valuations need to be done, It would also have the advantage that with no stamp duty a smaller deposit would be needed so more first time buyers could be "pushed" onto the ladder, altho the annual nature of the tax would mean in the long run they would be paying a lot more ... Over time the percentages can creep up , just as stamp duty has .... You would end up with a similar situation as in California where there is a 1% property tax per year based on the last traded price of the house so old people can pay 1/20th of what the neighbour who just bought pays, and in this case most would pay zero .... The scots would benefit from the removal of stamp duty but not pay the yearly tax ...

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So the old lady with a pittance of a pension, who's lived in the same house all her life, now has a whacking annual tax bill of 1% of the value of her house, all because of liar loans inflating its value?

Whilst the investment banker who rents his flat in Canary Wharf now pays 25% tax on his bonus instead of 40% or 50%?

Devil's Advocat says this tax has some flaws.

This has all been discussed in-depth before. One of the councils in the UK even did an investigation into changing council tax for a LVT and published the results - there is/was a link on here somewhere for it. I don't have it right now though but will try to look later. But essentially the yearly fee is not too different to current council tax. If you're in a median 3/4/5 bedder it's about even. A smaller 1/2 bed terrace or flat a few hundred £'s better off. Anything bigger than that (easily over £500k) and you're up to a £1000-£1500 worse off.

The OAP will almost certainly be able to offset the tax against the equity in the house so they're not at risk of being evicted tomorrow. Besides, how do they manage to pay council tax at the moment?

And saying it will be redirected into a reduction in Income Tax is misleading at best.

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As a new tax it would probably work as long as it could be structured so as to comply with the two basic laws of new taxes, which are that it must screw the poor and average young while being kind to the wealthy elderly as well as there being some special deal whereby the Scots can be exempt from paying anything. ( the university charging regimen is a perfect example of these rules in action )

In order to meet these criteria I would say that the best way a government could launch it is to start off low and offer some sort of saving in exchange , so I would imagine a .5% a year tax on the sales price for all new English transactions with maybe 1% for property above 1 million ( so clegg gets his mansion tax ) , in exchange for getting rid of stamp duty . Thus people in existing property don't pay anything and stamp duty is turned into a taxation every year which will raise much more money in the long run. being a form of stamp duty all the infrastructure is in place already too so no valuations need to be done, It would also have the advantage that with no stamp duty a smaller deposit would be needed so more first time buyers could be "pushed" onto the ladder, altho the annual nature of the tax would mean in the long run they would be paying a lot more ... Over time the percentages can creep up , just as stamp duty has .... You would end up with a similar situation as in California where there is a 1% property tax per year based on the last traded price of the house so old people can pay 1/20th of what the neighbour who just bought pays, and in this case most would pay zero .... The scots would benefit from the removal of stamp duty but not pay the yearly tax ...

In San Diego spoke to a limo driver whose property is worth more than a million now, he said he would never sell as could not afford the property tax on buying something similar as he paid virtually nothing at present.

An averaged nice semi in london would be paying at least three times what council tax they paid now at 1%, not going to happen.

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In San Diego spoke to a limo driver whose property is worth more than a million now, he said he would never sell as could not afford the property tax on buying something similar as he paid virtually nothing at present.

An averaged nice semi in london would be paying at least three times what council tax they paid now at 1%, not going to happen.

If you assume that the average person living in a nice semi in London is a higher rate tax payer then with a higher personal allowance and lower tax rate they should be able to afford the increase comfortably.

What they may not be able to afford is the tax on their 2 BTLs and holiday home in Cornwall...

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So the old lady with a pittance of a pension, who's lived in the same house all her life, now has a whacking annual tax bill of 1% of the value of her house, all because of liar loans inflating its value?

Maybe this would encourage the old lady to move to a smaller property, one more in keeping with her needs, and allow a young family to utilise the same house? This is actually the point of a land tax - to encourage the efficient use of land. Does the old lady have any more "right" to live in a large house than a working family?

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So the old lady with a pittance of a pension, who's lived in the same house all her life, now has a whacking annual tax bill of 1% of the value of her house, all because of liar loans inflating its value?

Whilst the investment banker who rents his flat in Canary Wharf now pays 25% tax on his bonus instead of 40% or 50%?

Devil's Advocat says this tax has some flaws.

This should be as an alternative to council tax, not really as a reduction in income tax (at least until the debt is more manageable). It seems unfair to me that someone working 40hrs+ a week can see over half their money gone in tax, but the old lady might have made £1m+ on her property for doing nothing and pays no tax.

I like the idea of 1%, with an allowance (maybe 1k), which would take anything below 100k out of the tax. A £1m home would cost 9k/year. By all means, allow this to be charged against the house and take it when they die, so no-one 'has' to move.

This £140m home (which they didn't even pay stamp duty on) would pay nearly £1.4m a year, rather than the 1k at the moment.

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If you tax something you get less of it & if you subside something you get more of it.

A land tax would mean land is used more efficiently. That in itself would result in lower land prices.

The average persons per house would increase.

Rents & prices would crash (largely as a result of people living more densely)

Overall it would be a huge transfer of wealth from the v.rich to the working poor and middle.

A good thing overall in the UK as the balance is wrong

A 2 to 4% land tax would be good but I would remove council tax instead & increase the tax free allowance

BTW business rates is a land tax for businesses in all but name.

:lol: :lol:

What would happen is the state would use the land tax money to buy all the land.

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Forgive me replying to my own thread but a very rough guess is as follows.

Google tells me that in 2009 the population of the UK was 61.838m

In 2002 there were apparently an average of 2.31 residents per property.

The average property value in the UK is currently £163k (land registery figures, this site)

So the value of UK property is (61838000 / 2.31) * £163k = £4363460606060 i.e £4.3 trillion.

Therefore £43bn could be raised with a 1% property tax and a 4% annual tax could completely remove the need for income tax.

Personally I'd favour a 1% land tax with a £15k annual allowance for all and a fixed rate of whatever (can't be more than 25%) above that.

Edit: Thanks porca misèria, great minds as they say.

A land tax is not a property tax. The value of the land is a lot less than the total value of the property. And you don't want a tax on property values, because it encourages people to deliberately vandalise property that's out of use in order to reduce its value and therefore the tax (quite apart from the difficulty of actually assessing property values fairly).

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This should be as an alternative to council tax, not really as a reduction in income tax (at least until the debt is more manageable). It seems unfair to me that someone working 40hrs+ a week can see over half their money gone in tax, but the old lady might have made £1m+ on her property for doing nothing and pays no tax.

I like the idea of 1%, with an allowance (maybe 1k), which would take anything below 100k out of the tax. A £1m home would cost 9k/year. By all means, allow this to be charged against the house and take it when they die, so no-one 'has' to move.

This £140m home (which they didn't even pay stamp duty on) would pay nearly £1.4m a year, rather than the 1k at the moment.

The issue with the property tax is if it crashes like we all want....then the tax tax falls.

better to have a rental value tax of 20% of the rental value (10% landlord 10% Tennant if rented).

800 £ per month 160 per month tax (which is about the same as council tax around here).

Rents are not as subjective as price and you can easily put in a system to appeal/revise the value.

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A land tax is not a property tax. The value of the land is a lot less than the total value of the property. And you don't want a tax on property values, because it encourages people to deliberately vandalise property that's out of use in order to reduce its value and therefore the tax (quite apart from the difficulty of actually assessing property values fairly).

I don't think that's likely. I'm talking about a 1% property tax. Why would anyone vandalise their own property, reducing its value by 20%, just to save 20% of 1% (i.e. 0.2%) in tax every year? Doesn't make sense.

The issue with the property tax is if it crashes like we all want....then the tax tax falls.

better to have a rental value tax of 20% of the rental value (10% landlord 10% Tennant if rented).

800 £ per month 160 per month tax (which is about the same as council tax around here).

Rents are not as subjective as price and you can easily put in a system to appeal/revise the value.

Surely rental value is linked to property value?

The advantage of a property tax is that it applies to people who own property, so it can't be avoided - you own property you pay tax (or it gets taken off you). It would probably result in lower property values, but crucially it would prioritise wealth creation/earnings over speculation/hoarding by virtue of facilitating a reduction in income tax. It's not without fault, but I think it's very fair none the less.

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Why would anyone vandalise their own property, reducing its value by 20%, just to save 20% of 1% (i.e. 0.2%) in tax every year? Doesn't make sense.

Used to happen a lot with business properties. Removing the roof dropped business rates enough to be worth doing.

Surely rental value is linked to property value?

How are you going to measure and update these values fairly and accurately, without using an expensive army of bureaucrats?

The advantage of a property tax is that it applies to people who own property, so it can't be avoided.

Except by not owning property. Live in a cheap flat in the UK during the week but (like Toynbee) have a large villa in Tuscany that is out of the reach of the tax authorities. The rich get richer?

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Used to happen a lot with business properties. Removing the roof dropped business rates enough to be worth doing.

How are you going to measure and update these values fairly and accurately, without using an expensive army of bureaucrats?

Other countries seem to manage it, surely it can't beyond the UK to do it equally well?

Except by not owning property. Live in a cheap flat in the UK during the week but (like Toynbee) have a large villa in Tuscany that is out of the reach of the tax authorities. The rich get richer?

Presumably they'd have to pay the equivalent taxes in Tuscany though. There will always be loopholes, but I think the number of people who do this are relatively small. Somewhere along the lines of the number of non-doms - not insignificant but not exactly going to break the country? It'll be more than made up by taxes due on large country estates and footballer McMansions.

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How are you going to measure and update these values fairly and accurately, without using an expensive army of bureaucrats?

How about a refined version of Zoopla, plus an appeal scheme with charges for appealing refunded if your appeal is successful?

Except by not owning property. Live in a cheap flat in the UK during the week but (like Toynbee) have a large villa in Tuscany that is out of the reach of the tax authorities. The rich get richer?

The converse is that other thread about someone buying a £140m property and paying no stamp duty and presumably an insignificant council tax bill. That's the rich getting richer. I'd rather have £1.4m per annum off some russian oligarch than next-to-nothing, and the UK will still be a good place to live. Besides, Polly's commuting costs must be higher than 1% of the value of a suitable home.

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How about a refined version of Zoopla, plus an appeal scheme with charges for appealing refunded if your appeal is successful?

If you set LVT at a high enough level to be meaningful, an automated system isn't going to cut it. You'd be swamped in appeals.

The converse is that other thread about someone buying a £140m property and paying no stamp duty and presumably an insignificant council tax bill.

Then close the stamp duty loophole. Indeed at the same time increase it, make it flat-rate and asymmetrically split between seller and buyer. Result: most of the advantages of LVT without the downsides.

Polly's commuting costs must be higher than 1% of the value of a suitable home.

OK so she emails in her nonsense and avoids paying tax altogether.

Edited by the shaping machine

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Other countries seem to manage it, surely it can't beyond the UK to do it equally well?

Which countries collect LVT instead of income tax?

How well it has to work is directly related to the amount people pay. 1000 quid a year? not worth appealing. 10,000? bring in the lawyers.

Presumably they'd have to pay the equivalent taxes in Tuscany though.

Doesn't help the UK deficit.

There will always be loopholes, but I think the number of people who do this are relatively small. Somewhere along the lines of the number of non-doms - not insignificant but not exactly going to break the country? It'll be more than made up by taxes due on large country estates and footballer McMansions.

I suspect that you over-estimate the value to be extracted from both of these. Besides a footballer could easily justify flying in from Monaco for each match.

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Used to happen a lot with business properties. Removing the roof dropped business rates enough to be worth doing.

A land tax is based on land values, not the property on it.

How are you going to measure and update these values fairly and accurately, without using an expensive army of bureaucrats?

Other countries manage it. Also, depends on what process you want to use. As long as it replaces other taxes, unlikely to be anywhere near the current army of bureaucrats and reams of legislation.

Except by not owning property. Live in a cheap flat in the UK during the week but (like Toynbee) have a large villa in Tuscany that is out of the reach of the tax authorities. The rich get richer?

Who cares? Despite what you might think, it's nothing to do with 'soak the rich'. If Toynbee doesn't pay the tax in the UK, someone else does. Somehow I don't think there will be huge unowned tracts of land in the UK as a result of a land tax. In addition, anyone productive will be happy enough to pay it as they will get to keep more of their income. It is the unproductive rentiers that will pay, as they should.

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Despite all the threads on this topic that have appeared on the HPC over the years I see that people still confuse Land Taxes with Property Taxes when they are not the same thing at all. The reason why we are never likely to see such a reform in the UK is not because it will hurt old ladies left in their family home but because it would mean that some of the people who have been hogging most of the UKs land since the Norman Conquest don't like the idea of paying their share of this tax. It should be noted that the interests of these large landholders is in many ways as pernicious as that of the banks. In fact I suspect that there is an interesting book to be written on how Land Ownership and City Financiers have over the years stifled more productive activities such as manufacturing in the last 100 years. The UK is still very much a country where the landed class is the ruling class.

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  • 285 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • up 5%



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