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fru-gal

Labour Proposing 0.5% Annual Property Wealth Tax If Elected To Power

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I guess I was reading into it as a 'local tax' suggesting it was for use locally. It could be redistributed, but in which case shouldn't it just be a national tax (like income tax) and then the central government distributes some of their tax take to councils based on some measure such as number of households, or through some kind of pitch process. Reminds me of an episode of Yes Prime Minister were Humphery wants to eliminate local government and centralise it all (not that I have an opnion on the merit of that). Would give the government extra cash to spend somewhere if they can get a surplus (or get councils to drop their spending).

Indeed

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Labour are just gagging to get in to every house every year and "value it".

They are creating a snoopers wet dream.

Every year, every house. An army of twats who will open every cupboard just in case you've made an ensuite and upped the value of your house accidentally.

True, which is why it's supposed to be a land value tax rather than a house price tax. You'd think Tristram Hunt would know this seeing as he actually quoted Henry George as the main proponent of this form of taxation. Oh well, bit much to expect Oxbridge-educated university lecturers like Hunt to have actually read the sources they cite I suppose.

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Does anyone know what the equivalent LVT in Switzerland is worth as a % ?

In Switzerland you are taxed on notional rental value (probably 70% of market), however you can offset mortgage interest & repairs, so you can't directly compare the 2. Switzerland also has a wealth tax.

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I have to say .. as somebody who lives in a million pound house in central london ... this is my absolute number 1 dream proposal.

Obviously such a tax would see my joke council tax shoot from 600 to 10,000 a year (as I don't fit the massive list of exemptions) which is completely fine as I don't particularly need to live here and somebody who is willing to pay the cost obviously does. As to other "incumbents," welcome to the world of flexible living that was forced on my generation from the get go. You'll get no sympathy from me and I will move gladly as it's what I have to do every 3 years anyway.

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Not sure why its "less regressive" per se.

Why not simply increase the current bands?

Well, they're are a bit coarse. Tell you what, why not just have loads of bands (say 100) and work out the tax roughly as a percentage of the midpoint.

Or why not just have the tax as a % of the value. You could just work it out as value at last transfer of ownership, which would keep all the pensioners in old houses happy.

Much of the civilised world pays property taxes as a proportion of value. Eg, Bill gates pays $1m a year on his place (value about $125m). Compare that with flats in One Hyde Park - council tax about $2000 pa.

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I can see it now .... all those poor pensioners trapped in their two million pound London terraced houses having to stump up £10,000a year .... far more than they paid for the whole house .... I am sat here crying at the thought of it. Westminster has one of the lowest council tax rates in the country.

Oh dear. Perhaps all those pensioners living in two million pounds London terrace houses will have to make a "judgement call" on whether they can afford to stay in their London piggybank house?

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There's been talk of this for years on here.

Most people IRL wouldn't like the idea, poor grannys in 10 mill homes in Chelsea that can barely afford to heat and eat...

Didnt Cheryl racist thug say "mansion tax would screw me over".

Some kind of land tax should be bought in.

Votes/promotes labour. Brags about her rags to riches background. Minute Labour started talking about taxes that might affect her, suddenly goes quiet.

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I have to say .. as somebody who lives in a million pound house in central london ... this is my absolute number 1 dream proposal.

Obviously such a tax would see my joke council tax shoot from 600 to 10,000 a year (as I don't fit the massive list of exemptions) which is completely fine as I don't particularly need to live here and somebody who is willing to pay the cost obviously does. As to other "incumbents," welcome to the world of flexible living that was forced on my generation from the get go. You'll get no sympathy from me and I will move gladly as it's what I have to do every 3 years anyway.

The point is though, prices at the upper end or desirable areas would adjust.

At one extreme, there is that £75mn mansion in Windlesham. If the tax bill went from £4k to £375k, I think its value would fall, perhaps to as low as £7.5mn.

Though I wonder how they will work it out. I did a search for Elton Johns new LA gaff. He paid $33mn. California has a 0.61% property tax (quite low for the US, actually)...I was expecting him to shell out $200k a year. In fact he is liable for less than $12k...presumably they use ancient valuations or something.

Will they rebase it to 1991 values, as they do currently?!

Will it be on last sale prices for an individual home, or an average indexed for inflation. You could end up with two identical houses on an estate paying quite different tax rates (no bad thing IMO, as it would encourage people to negotiate a lower sales price, but most would probably find it 'unfair')

A straight LVT would be so much easier and less bureaucratic. Use existing GIS to calculate land take, tax per m2. Job done. Its land that there is a 'shortage' (imposed or real) of, not floorspace, which can be created easily. Seems odd that a property with a small house that monopolizes an acre of land wouldnt necessarily pay more than a mansion on a tiny plot. The former gobbles up more land resource.

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Would be truly hilarious to see it implemented around here. Most locals would likely end up paying approx half of their existing council tax. Local farmers and the big landowners would be utterly fecked. As the owner of the cheapest house in the street by some margin I would be laughing. If it was based on last sale price, I would be paying just over 1/3 of my current council tax.

More seriously, because of the above it would have to localised ie in London you pay 0.25%, and around here 1%. I can't see it generating enough revenue around here otherwise.

Edited by StainlessSteelCat

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I would be interested to see the impact of this policy. 0.5% isn't massive, but some things I can think of..

Fair questions. To put them in perspective, try a description in the same terms of council tax (and business rates). How do those same questions look?

Or why not just have the tax as a % of the value. You could just work it out as value at last transfer of ownership, which would keep all the pensioners in old houses happy.

Once upon a time we had the rates. One problem with them was lack of revaluation. When the rates ended, I was paying twice as much for a one-bed flat as my then-colleagues were for three and four bed houses in the same area, because the flat had been more recently re-rated (when the house was converted to flats). Just one of the ways younger people were screwed over in that era.

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My ears pricked up when I heard Tristran Hunt proposing this. Taxes were originally brought in to tax wealthy rentiers/landowners as they could afford it but more recently we have had a tax on income which hits more people but is disproportionate to ability to pay compared to the rich rentiers who do nothing to "earn" their income. It's about time for a wealth tax. I don't know why it's taken so long to get round to this way of thinking. Incidentally Piketty also recommends it in his book "Capital".

I agree it could be difficult to implement and maybe LVT would be easier to do than taxing property itself but this surely is the way forward. Why stop at property maybe fine art or expensive jewellery or cars could also be taxed.

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  • 224 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% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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