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European Commission Urges Uk To Tax Expensive Homes More

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http://www.bbc.co.uk/news/uk-politics-27675294

The European Commission has called on the UK to raise taxes on higher value properties, build more houses and adjust the Help to Buy scheme.

The commission said council tax bands should be revalued, which would put up bills for some people.

Each year the commission offers member states advice intended to help ensure long-term growth.

The Treasury said the UK, as one of the fastest growing economies, would listen to the commission with interest.

'Boost supply'

In far-reaching recommendations the European Union's executive body also said the UK should prioritise capital spending.

The commission described Britain's council tax system as "regressive", being relatively high on lower value properties.

Overhauling council tax bands will prove popular. This also assumes that those living in expensive housing can afford high taxes on the property. This could force poorer people out of their homes.

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I am always very skeptical when it comes to increased taxation. But yes, adding council tax bands for assets worth north of 1M or so would sort of make sense.

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http://www.bbc.co.uk/news/uk-politics-27675294

Overhauling council tax bands will prove popular. This also assumes that those living in expensive housing can afford high taxes on the property. This could force poorer people out of their homes.

Boohoo, the mythical 'pauper' widows in 5 bed houses will have to cry into the piles of cash they'll have left over after downsizing...

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I'd like to think the Tories would accept a house price crash if they could blame it on Europe.

However they had the opportunity to blame one on Labour when they first got in and passed that up, so no chance of them deliberately letting anything correct properly then.

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Boohoo, the mythical 'pauper' widows in 5 bed houses will have to cry into the piles of cash they'll have left over after downsizing...

I'm on about the people with families who have got a large house but in poorly paid jobs. I know of a few people who live in properties they couldn't afford to buy now.

However the EU is eyeing revenues assuming people will just keep pushing up house prices and therefore taxes. If prices correct will the taxes as well?

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I am sure it is on top of the list of the landed gentry who are in control to transfer some of their wealth to other people's families.

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However the EU is eyeing revenues assuming people will just keep pushing up house prices and therefore taxes. If prices correct will the taxes as well?

Yes, if the government did something sensible like writing into law that council tax bands had to be completely re-evaluated every ten years. This would both protect people from being trapped paying excessive rates if the market fundamentally altered and would also end the ridiculous situation where people in London are paying 1991-level rates for properties that have tripled or quadrupled in value since then.

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http://www.bbc.co.uk/news/uk-politics-27675294

Overhauling council tax bands will prove popular. This also assumes that those living in expensive housing can afford high taxes on the property. This could force poorer people out of their homes.

Also, this has just popped up as a news item but already the usual suspects are leaping up to voice their horror at such a progressive move. In this Beeb article there's something called Business for Britain moaning about more high taxes and the Taxpayers Alliance (of course!) warning ominously that re-evaluating council tax bands fairly would just reduce supply even further, for some unspecified reason... Edited by Umiapik

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I'm on about the people with families who have got a large house but in poorly paid jobs. I know of a few people who live in properties they couldn't afford to buy now.

However the EU is eyeing revenues assuming people will just keep pushing up house prices and therefore taxes. If prices correct will the taxes as well?

There are plenty of people who can't afford to buy the house they live in now - myself included which is why I'm renting it. If I couldn't afford the council tax, I would indeed move somewhere smaller/cheaper...

As you say, the danger is that like business rates, this would be just another tax on top of everything else that never goes down - it could however also be the start of a move away from taxing earnings and towards taxing unearnt wealth if implemented properly.

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There are plenty of people who can't afford to buy the house they live in now - myself included which is why I'm renting it. If I couldn't afford the council tax, I would indeed move somewhere smaller/cheaper...

As you say, the danger is that like business rates, this would be just another tax on top of everything else that never goes down - it could however also be the start of a move away from taxing earnings and towards taxing unearnt wealth if implemented properly.

Just needed a slight edit there :D

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I'm on about the people with families who have got a large house but in poorly paid jobs. I know of a few people who live in properties they couldn't afford to buy now.

However the EU is eyeing revenues assuming people will just keep pushing up house prices and therefore taxes. If prices correct will the taxes as well?

Shame you're not more concerned for people with familier who have got small houses but in poorly paid jobs.

Council taxes are deeply regressive. Complete no brainer to increase no. of bands and raise property taxes on higher value properties so the less well off contribute relatively less.

Astonished by the numbers of millionaire right wing Tories posting on this site. It's like the Grant Shapps appreciation society on here these days.

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Shame you're not more concerned for people with familier who have got small houses but in poorly paid jobs.

Council taxes are deeply regressive. Complete no brainer to increase no. of bands and raise property taxes on higher value properties so the less well off contribute relatively less.

Astonished by the numbers of millionaire right wing Tories posting on this site. It's like the Grant Shapps appreciation society on here these days.

If prices hadn't gone up so much those in poorly paid jobs would be able to buy a larger house. But as prices keep going up that step up the ladder gets ever costlier.

A fairer way to do this tax would be to link the tax on the property to wages.... Just think how the right wingers will love that!

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For sure the VIs will soon be saying that if people with £1 million + houses have to pay more council tax then they'll all up sticks and go to live overseas - like the bankers. Well in London lots of buyers are from overseas to start with.

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If prices hadn't gone up so much those in poorly paid jobs would be able to buy a larger house. But as prices keep going up that step up the ladder gets ever costlier.

A fairer way to do this tax would be to link the tax on the property to wages.... Just think how the right wingers will love that!

If these people you have in mind are so poorly paid, would they be wise to take on the running costs of a larger house, whatever the price?

And as for linking council tax to wages - surely this would delight the asset rich but intentionally jobless members of the 1%? Did you mean 'incomes', or do you really feel sorry for wealthy jobless people?

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it could however also be the start of a move away from taxing earnings and towards taxing unearnt wealth if implemented properly.

Here's hoping, although that last part is probably overly optimistic...

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Astonished by the numbers of millionaire right wing Tories posting on this site. It's like the Grant Shapps appreciation society on here these days.

(Please forgive me in advance as I'm half way through a bottle of fermented grape juice :P )

I'm even more astonished by the lack of left-wingers on this site; it's almost as if they're not concerned by the inexorable rise of housing costs - already the biggest item in the budget for many lower-income families.

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I'm on about the people with families who have got a large house but in poorly paid jobs. I know of a few people who live in properties they couldn't afford to buy now.

However the EU is eyeing revenues assuming people will just keep pushing up house prices and therefore taxes. If prices correct will the taxes as well?

Yes, we rather tax your work if you earn more than crazy £15k pa (you rich *******), but we will never tax your £500k, £1mill, £10mill house ....

512px-UK_tax_NIC_percentages.svg.png

Edited by Damik

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Increasing taxes on peoples main houses just makes housing less affordable. You've already paid tax on your earnings, then paid stamp duty to buy it, then have to pay ongoing council tax. If you've bought a house with your savings then why should you pay extra taxes on your tied up money when if you keep it in the bank you don't?

A lot of people spend all they have on paying for and maintaining their homes as it is so if they're talking about increasing taxes on say Band E properties and lower, which are pretty standard family homes to starter homes then I think it's a bad idea. Makes more sense to create more bands above H for the more expensive properties. I think the BTLers, investors and multi property owners should be whacked with tax rises first.

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Increasing taxes on peoples main houses just makes housing less affordable. You've already paid tax on your earnings, then paid stamp duty to buy it, then have to pay ongoing council tax. If you've bought a house with your savings then why should you pay extra taxes on your tied up money when if you keep it in the bank you don't?

A lot of people spend all they have on paying for and maintaining their homes as it is so if they're talking about increasing taxes on say Band E properties and lower, which are pretty standard family homes to starter homes then I think it's a bad idea. Makes more sense to create more bands above H for the more expensive properties. I think the BTLers, investors and multi property owners should be whacked with tax rises first.

If your savings go up in value, you get taxed on the increase in value, if your house goes up in value why do you think you should get to keep all the unearned income? How is it magically more special than savings interest you did no work for?

I'm not a fan of stamp duty either - it's on the wrong end of the transaction IMO -we should just have CGT on sales of any house...

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(Please forgive me in advance as I'm half way through a bottle of fermented grape juice :P )

I'm even more astonished by the lack of left-wingers on this site; it's almost as if they're not concerned by the inexorable rise of housing costs - already the biggest item in the budget for many lower-income families.

They love it, use 2007 as a floor, and think the money never runs out.

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I'm not sure why so many people on here who want cheaper housing want higher taxes on houses. I don't see the sense in peanalising people who live in houses whose prices are being driven up by factors outside of their control. Like all taxes, they need to be applied to the masses to generate enough tax, so higher taxes will just feed through to everyone. We need cheaper housing, not more expensive housing. This means more houses being built, fewer people coming to the country, higher interest rates and lower stamp duty to make it more viable to move to another property when needs change.

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If your savings go up in value, you get taxed on the increase in value, if your house goes up in value why do you think you should get to keep all the unearned income? How is it magically more special than savings interest you did no work for?

I'm not a fan of stamp duty either - it's on the wrong end of the transaction IMO -we should just have CGT on sales of any house...

The increase in value of someone's home is not really income. It is no use, as you still need the home. It would be better if the prices did not increase.

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http://www.bbc.co.uk/news/uk-politics-27675294

Overhauling council tax bands will prove popular. This also assumes that those living in expensive housing can afford high taxes on the property. This could force poorer people out of their homes.

Um, the bad thinking and planning of the EU system encourages hundreds of thousands to come to UK, which causes a price hike in property prices, and their only solution to this is to tax us even more, i see many people looking to Ukip if this happens.

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I'm not sure why so many people on here who want cheaper housing want higher taxes on houses. I don't see the sense in peanalising people who live in houses whose prices are being driven up by factors outside of their control. Like all taxes, they need to be applied to the masses to generate enough tax, so higher taxes will just feed through to everyone. We need cheaper housing, not more expensive housing. This means more houses being built, fewer people coming to the country, higher interest rates and lower stamp duty to make it more viable to move to another property when needs change.

Because it makes housing cheaper. Lets say we have a 2% LVT. Think about it. What do you think that will do to house prices as all those people who can't afford the LVT try to sell to move to cheaper houses?

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I'm not sure why so many people on here who want cheaper housing want higher taxes on houses. I don't see the sense in peanalising people who live in houses whose prices are being driven up by factors outside of their control. Like all taxes, they need to be applied to the masses to generate enough tax, so higher taxes will just feed through to everyone. We need cheaper housing, not more expensive housing. This means more houses being built, fewer people coming to the country, higher interest rates and lower stamp duty to make it more viable to move to another property when needs change.

If the whole emphasis of taxation was moved over from taxing people's effort to taxing their use of natural resources then the lack of any income tax would encourage productivity (anything you make would be your own) and the presence of a resource tax would encourage efficient use of said resources (in fact the level of tax paid would become a matter of individual choice for all, because the level of resources used would remain optional). Not sure that the taxes being discussed by the EC would necessarily lead there but they might steer the discussion in that direction, and replacing income tax with a land value tax would actually encourage house building because taxing the value of the underlying unimproved land would have the developer paying the same tax to hold that land empty as to develop it and turn a profit, thus making the latter option more attractive. It would also suppress speculation and therefore runaway price booms as holding land would incur a continual cost.

The increase in value of someone's home is not really income. It is no use, as you still need the home. It would be better if the prices did not increase.

Unfortunately there are a significant number of people and companies who are speculating on UK housing, to them it isn't (just) a home and HPI is being used as a (future) income/wealth store. Back in 1909 Winston Churchill made a very good speech about how these increases in land value are both derived from the labour of the community and made at the detriment of the community:

Land monopoly is not the only monopoly, but it is by far the greatest of monopolies -- it is a perpetual monopoly, and it is the mother of all other forms of monopoly.

Unearned increments in land are not the only form of unearned or undeserved profit, but they are the principal form of unearned increment, and they are derived from processes which are not merely not beneficial, but positively detrimental to the general public.

Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position -- land, I say, differs from all other forms of property, and the immemorial customs of nearly every modern state have placed the tenure, transfer, and obligations of land in a wholly different category from other classes of property.

. . .

Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits still. Every one of those improvements is effected by the labor and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived.

While the land is what is called "ripening" for the unearned increment of its owner, the merchant going to his office and the artisan going to his work must detour or pay a fare to avoid it. The people lose their chance of using the land, the city and state lose the taxes which would have accrued if the natural development had taken place, and all the while the land monopolist only has to sit still and watch complacently his property multiplying in value, sometimes many fold, without either effort or contribution on his part!

But let us follow this process a little further. The population of the city grows and grows, the congestion in the poorer quarters becomes acute, rents rise and thousands of families are crowded into tenements. At last the land becomes ripe for sale -- that means that the price is too tempting to be resisted any longer. And then, and not until then, it is sold by the yard or by the inch at 10 times, or 20 times, or even 50 times its agricultural value.

The greater the population around the land, the greater the injury the public has sustained by its protracted denial. And, the more inconvenience caused to everybody; the more serious the loss in economic strength and activity -- the larger will be the profit of the landlord when the sale is finally accomplished. In fact, you may say that the unearned increment on the land is reaped by the land monopolist in exact proportion, not to the service, but to the disservice done. It is monopoly which is the keynote, and where monopoly prevails, the greater the injury to society the greater the reward to the monopolist. This evil process strikes at every form of industrial activity. The municipality, wishing for broader streets, better houses, more healthy, decent, scientifically planned towns, is made to pay more to get them in proportion as is has exerted itself to make past improvements. The more it has improved the town, the more it will have to pay for any land it may now wish to acquire for further improvements.

The manufacturer proposing to start a new industry, proposing to erect a great factory offering employment to thousands of hands, is made to pay such a price for his land that the purchase price hangs around the neck of his whole business, hampering his competitive power in every market, clogging him far more than any foreign tariff in his export competition, and the land price strikes down through the profits of the manufacturer on to the wages of the worker.

No matter where you look or what examples you select, you will see every form of enterprise, every step in material progress, is only undertaken after the land monopolist has skimmed the cream for himself, and everywhere today the man or the public body that wishes to put land to its highest use is forced to pay a preliminary fine in land values to the man who is putting it to an inferior one, and in some cases to no use at all. All comes back to land value, and its owner is able to levy toll upon all other forms of wealth and every form of industry. A portion, in some cases the whole, of every benefit which is laboriously acquired by the community increases the land value and finds its way automatically into the landlord's pocket. If there is a rise in wages, rents are able to move forward, because the workers can afford to pay a little more. If the opening of a new railway or new tramway, or the institution of improved services of a lowering of fares, or of a new invention, or any other public convenience affords a benefit to workers in any particular district, it becomes easier for them to live, and therefore the ground landlord is able to charge them more for the privilege of living there.

. . .

I hope you will understand that, when I speak of the land monopolist, I am dealing more with the process than with the individual land owner who, in most cases, is a worthy person utterly unconscious of the character of the methods by which he is enriched. I have no wish to hold any class up to public disapprobation. I do not think that the man who makes money by unearned increment in land is morally worse than anyone else who gathers his profit where he finds it in this hard world under the law and according to common usage. It is not the individual I attack; it is the system. It is not the man who is bad; it is the law which is bad. It is not the man who is blameworthy for doing what the law allows and what other men do; it is the State which would be blameworthy if it were not to endeavour to reform the law and correct the practice.

We do not want to punish the landlord.

We want to alter the law.

The full text of Churchill's speech is available here and well worth a read: http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html

Edited by Lo-fi

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