My issue is that this doesn't address the inequality and oddities in the system.
For example: we are an extended 3-4 bed semi-detached. Next door has a larger extension. But have a lower council tax rating (D) than ours (E). We pay the same as the 5 and 6 bed homes that are twice the floor area as ours in the cul-de-sac. Our appeal was turned down.
We've been looking at new, low energy new homes of lower value and size than our current home - but they're all another band or two Council Tax higher than our home as they are a 'new' valuation.
The system is broken - and this proposal does nothing to address that.
I agree in principle with a tax that is local and which does tax some of the biggest financial assets we have. I think it should have an element of encouraging sustainability and low energy, should have an element based on income, and an element based on second homes / holiday let / business use Rates.
I think they need to add many more bands above the current ones.
They also need to revalue every property in Scotland, and start from there.
And nothing is going to be perfect.
Local Income tax: At least that is linked to ability to pay & can be as progressive as you like.
I’ve a vague belief that in the USA the local, state, and federal tax system presents some interesting incentives and challenges to residents.
In the U.K. I’m not convinced that local income taxes could be administered equitably or effectively.
An interesting topic though. Suppose you work and live in a £1,000,000 house. Your income is, say, £500,000 pa. Your local income tax is set at 10%. You pay £50,000 pa? Then you retire and your income drops to £50,000 perhaps. You now pay £5,000 pa. A predictable loss to the local revenue service. One that will not be made up until you move out though. Maybe 30 to 50 years.
With a property tax at the same rate the income is £10,000 pa. And if the value is reassessed on sale then income increases without disadvantaging the current resident.
🤷🏻♂️ local taxes I’d suggest are more valuable and important than national ones. Especially in the U.K.
Some context...
Some of the issues raised have since been resolved by the introduction of a Scottish Income Tax variation though.
It's always been unfair to some, same with almost every tax, remember the poll tax that the council tax took over from! I doubt it'll ever be fair, i've lived in houses like you, where it's half the size of others in the street, but higher banding as it's all around antiquated 1991 pricing and that's it, they'll never do wholesale reassessments, and councils are all pretty much broke now, so fighting for every penny they can get.
Sorry, my arithmetic was dodgy earlier.
Trying to multitask. 🙄
Our 2 year old, 2 bedroom house in Argyll & Bute is band E, which is the same or more as many 4- bedroom houses - the council originally put us in band G as the originally planning for this plot was a 5-bedroom house. We can’t even get a discount for having no waste collection as the council has decided the road down is too steep even though we’re only 200m from the depot - they haven’t even tried to drive down. It’s a complete lottery.
Local Income tax: At least that is linked to ability to pay & can be as progressive as you like.
Not so sure. We really don't need any more encouragement for retired folk to sit rattling around in larger houses than we have already when we need housing stock to be used efficiently.
But yes, the system does appeal borked.
First of all we need accurate, up to date valuations. Secondly we need a genuinely local tax administered by local councils not just another national tax with a "local" mask on , behind which holyrood pulls the strings. We also need to consider if our main tax should be raised from wealth or income.
Local Income tax: At least that is linked to ability to pay & can be as progressive as you like.
Get that to ****. Wealth tax is what we need not taxing the ever shrinking pool of working age folk more.
On my street of 15 family size houses there are only 2 of us who work. The rest are retired on comfy DB pensions or unearned property wealth. The wealth is no longer in the working age population.
Not so sure. We really don’t need any more encouragement for retired folk to sit rattling around in larger houses than we have already when we need housing stock to be used efficiently.
💯
Neighbours to the left only 1 retired person in each 5 bed house
Neighbours to the right couple in their 80s rattling around in a large house with a garden they can't manage.
There also needs to be a CGT amnesty to free up flats that accidental landlords have kept hold of to provide places for down sizers to go to.
On my street of 15 family size houses there are only 2 of us who work. The rest are retired on comfy DB pensions or unearned property wealth. The wealth is no longer in the working age population.
5 out of 24 working in our street - 19 retired.
They key thing is a revaluation. Its many decades out of date. Hell of an exercise to do tho. I personally would lose out in a revaluation
On my street of 15 family size houses there are only 2 of us who work. The rest are retired on comfy DB pensions
Then they’ll still be paying tax on their pension incomes no?
They also need to revalue every property in Scotland, and start from there.
Call me cynical, but were that to happen I doubt that most 'normal' people would wind up better off.
If your appeal had been upheld and everyone else's was adjusted upwards would you feel better?
My utopia for taxation. Worldwide flat rate on every movement of money. If you buy a house, pay a mortgage, whatever, you pay tax. Means anyone spending money is paying tax. Anyone earning money into their account is paying tax. Any in/out is taxed. Completely impractical and never going to happen, but hey, utopia and all that.
We also need to consider if our main tax should be raised from wealth or income.
I think this is why I err towards a council tax which is a hybrid of local income tax and a property tax. And it's double for a second home.
I also am a fan of harmonising tax rates across all sorts - so corporation tax is same as income tax, is same as interest on shares, savings and capital gains etc. Then there's no incentive to move things around - your going to pay X a amount anyway.
I think they are missing a good opportunity here. Some houses are so poorly insulated they are adding to global warming through increased use of fossil fuels.
I would base the amount you pay on the EPC rating. Houses rated G in their EPC would pay the highest rate an A the lowest. This would encourage people to improve their insulation etc and get their house re rated. If all housing was improved to C rating it would be a major contribution to the fight against global warming. The government should also offer more grants to help those struggling to afford improvements.
I think they are missing a good opportunity here. Some houses are so poorly insulated they are adding to global warming through increased use of fossil fuels.
I would base the amount you pay on the EPC rating. Houses rated G in their EPC would pay the highest rate an A the lowest. This would encourage people to improve their insulation etc and get their house re rated. If all housing was improved to C rating it would be a major contribution to the fight against global warming. The government should also offer more grants to help those struggling to afford improvements.
So basically those who can't afford to fix up their house are hit with higher taxation, and those who can afford to fix their homes are on lower taxation?
You've already got ULEZ and the likes punishing those who can't afford compliant cars, now you want folk who can't afford house improvements to pay extra tax, to cover those who can actually afford it?!
Nobody wants a house that's not energy efficient, we all want the best windows, insulation, etc, but they cost money!
Was going to say the same. You clearly live in a pretty deluded world. In addition EPC is broken too - are you aware that two identical homes, one rural and one in town both with gas heating but the rural one using LPG will have different EPC ratings? Not because lpg is more polluting than town gas but because it costs more so is deemed less efficient. If the town house was a C, the rural house would be an E.
I do think that we could look to make this a transition - to a hybrid of property value, EPC and income tax based costing, with significant grants available to insulate. Those grants go direct to the energy companies who through a smart meter can easily demonstrate energy use per m2, not dodgy epc's...
As I said, I think we need to go back to a 'first principles' and see this tax as an opportunity for a fairer and more sustainable future for people and the public services we fund.
Are you expecting the shame wower of shankers who created the fair, equitable, easy to use, clearly defined, loophole and advantage free income tax rules to come up with a fair, just equitable house tax system ?
They key thing is a revaluation. Its many decades out of date. Hell of an exercise to do tho. I personally would lose out in a revaluation
It was done in England (and Wales?) around 2005/6. Then the government of the day decided it was a vote loser and bottled it when they saw the outcomes.
Most tax changes have winners and losers - sadly the politicians decide what to do based on their chances of staying in power in tne short term, rather than what is best for country in the medium/long term.
So basically those who can’t afford to fix up their house are hit with higher taxation, and those who can afford to fix their homes are on lower taxation?
This would hit me hard.
I live in a 5-bedroom house. I'm in council tax band A. Because I chose to live in Burnley rather than Cambridge.
The house is over 100 years old, I have no doubt that it leaks energy like, well, an 1890s house. It's on my to-do list to improve but there are no quick wins to be had and I have no surplus cash, quite the opposite.
"I agree in principle with a tax that is local and which does tax some of the biggest financial assets we have"
why should your house determine how much you contribute to local roads, bin collection, schools, police etc? It should be a flat rate for everyone.
why should your house determine how much you contribute to local roads, bin collection, schools, police etc? It should be a flat rate for everyone.
Why should your income dictate how much to pay towards Education, emergency services, Health, Transport and Defence (etc)?
Something has to, though I appreciate that "tax the rich" is a weirdly unpopular notion in some quarters (not least of all the rich).
Base it on number of occupants, is that fairer? We kinda do this already, you get a discount if you live alone. We could have a sliding scale, the more people in the house then the more likely they are to need services so get taxed higher.
We could even rename it to something shorter and more punchy.
We could even rename it to something shorter and more punchy
We need to take a poll on that...
A couple of points
- the amount you pay is based on a your local council. You can be in a higher band in one council area, but pay less than someone in a lower band in other council.
- council tax is cheap and easy to collect. We know where the properties are and who owns them.
- If we had a local income tax, this requires a whole new level of administration in each council to work out what to collect and talk HMRC, who would also need to update all of their systems, before we talk about any other issues.
- a wealth tax is difficult. Do you tax those people who have saved, via a pension or otherwise, for old age? Pensions are a large part of most peoples wealth. Do you force people out of their homes who can't afford the tax and have to sell their homes - remembering that for some people the value of their home is their retirement investment. I agree totally that we need to encourage people to downsize when they no longer need a large house, but we have an insufficient housing stock at the moment and so no where for them to go.
- We did have a tax which was based on the number of people living in a house. Remember it, riots all over the country.
- And if we did revalue all properties, we would end up with the same houses in the same bands, Just the bands would have different values.
I did wonder whether I was being too subtle.
– And if we did revalue all properties, we would end up with the same houses in the same bands, Just the bands would have
differenthigher values.
FTFY.
And honestly, I'm not sure that's actually the case. Plenty of houses have likely changed a lot (for better or worse) since their original valuation.
We could have a sliding scale, the more people in the house then the more likely they are to need services so get taxed higher.
High occupancy tends to mean lower income.
When I moved out of Edinburgh into fife, I sold my one bed flat and bought a four bed new build for not much more. I hadn’t counted on my council tax banding going up 4 bands and my council tax more than trebling
i do get a bit irate that my mate who still lives in Edinburgh in a 3 bed house worth 2.5 times mine, pays less, despite me being single and him living with his wife and kids
ultimately a 20% council tax rise won’t cripple me, and it peanuts compared to the mortgage increases and bill rises over past year. Half of me thinks why the xxxx should I pay 75% of what the family of 6 2 doors down the road from me pay, but then I remember the alternative was Maggie’s poll tax and I slap myself for even contemplating that that would be a good idea
i think a good start would be reevaluation of house prices. There is absolutely no way it’s fair that a house worth 100k more than mine half a mile down the road in same town should be in a lower bracket simply because it’s older and no one has properly reevaluated its value since the early 90s, yet that is the reality
High occupancy tends to mean lower income.
Does it?
The problem with local income tax is that poorer areas tend to need more money spending as they have more problems but people have less money there, and fewer have good jobs, so the tax per person goes up, those with higher pay move to more affluent lower tax boroughs and the cycle reinforces itself. It happens here on the Teesside North Yorshire border and probably does in most large towns and cities.
The fact that a one bed flat in Edinburgh costs more than a nice house in Fife is a problem of overinflated prices but IMO the larger house probably needs to pay more land tax/ council tax irrespective. Whether it should change at the county border is difficult. The outlying town will use the city services but large cities also suck up investment away from towns and need more money spent (NB this isn't peculiar to one city so I'm not picking on Edinburgh or Fife).
Apart from being unpopular a poll tax exacerbates the problems of one or two people rattling around in large house.
I do however think that the property owner should be liable for property/ council tax / rates not the tenant as councils spend a fortune chasing tenants who move or get moved on for money but landlords get avoid paying or reduced payments when house are empty. Makes collecting arrears simple as the council just puts a charge on the property which can't move. If the landlord ends up owing more than a house is worth then hey presto a new council house.
at least water is included in council tax north of the border :0)
management seem to struggle with current arrangements let alone more admin
The problem with local income tax is that poorer areas tend to need more money spending as they have more problems but people have less money there, and fewer have good jobs, so the tax per person goes up, those with higher pay move to more affluent lower tax boroughs and the cycle reinforces itself.
Does it?
I moved from a poorer rural place to find twice as many services from the same council in my leafy middle class commuter town. While I agree there is more investment in some things in poorer areas, I am not sure we can blanket assume.
These aren't the same.
The problem with local income tax is that poorer areas tend to need more money spending as they have more problems but people have less money there, and fewer have good jobs, so the tax per person goes up, those with higher pay move to more affluent lower tax boroughs and the cycle reinforces itself.
"Need."
Does it?
I moved from a poorer rural place to find twice as many services from the same council in my leafy middle class commuter town.
"Actually receive."
Fair points Cougar.
Poorer areas tend to need to spend more money on social care and other types of support and infrastructure for this to maintain. Sadly increased vandalism and crime also cost poorer areas.
More affluent areas thus have more money available for services (as you have) or can reduce council taxes (as happens in a lots of English counties with Tory councils).
Rural areas cost more to maintain due to distance and the funding formulae rarely acknowledge the issue of rural poverty as most of these areas are far from the big cities of power (think Mid Wales, large areas of Scotland, the English Pennines and Cornwall away from the coast). Rural poverty is also often less obvious as it isn't concentrated in a single visible entity as is often the case in towns and cities and the affluent places are more visible (you can see a large house with horse paddock more easily than a row of old cottages originally built to be out of sight of the big house).
Rural poverty is also often less obvious as it isn’t concentrated in a single visible entity
You can't blame visitors for not noticing it , they see the landscape or the castle etc,they are on holiday or a weekend off.
National and local government has no such excuse.
I think they are missing a good opportunity here. Some houses are so poorly insulated they are adding to global warming through increased use of fossil fuels.
I would base the amount you pay on the EPC rating. Houses rated G in their EPC would pay the highest rate an A the lowest. This would encourage people to improve their insulation etc and get their house re rated. If all housing was improved to C rating it would be a major contribution to the fight against global warming. The government should also offer more grants to help those struggling to afford improvements.
This is the same level of imbecilic thinking as Patrick Harvies heat pump proposal.
I'll use a couple of examples. I live in a Granite Terrace in a conservation area. I'm lucky that I have UPVC double glazing that was installed before the conservation area was established. However, I've installed as much loft insulation as I can, but these properties aren't cavity insulated as you can't. Many people on my street can't fit high efficiency double glazing due to the outdated and ridiculous planning laws that states you have to maintain the original sashes. As a result, one window replacement is now c. £20k not £5, and over £100k to replace all the windows on a £150k property. As such, my EPC rating will be lower than someone who lives in a high efficiency modern house - not all the crap Barretts builds popping up. As such, most people under your plan would pay through the nose because they can't afford either a high efficiency modern build, and can't move because the new rules have rendered your existing asset worthless. I also can't improve my EPC rating as any attempts wouldn't get planning permission. (Read also why most people living in conservation areas would be worse off and have a higher energy use with a heat pump).
My partners parents live in a stone double upper down the coast on a very modest pension. Their council tax would go up, because their EPC would be poor, but again, they can't make improvements to windows because of the idiotic planning restrictions. They can't move because they can't afford to. They can't put in new windows to comply with planning because they can't afford to. So what happens to them?
Conservation area rules have to go if we are to have any chance of modernising heating. I too am stuck with draughty ancient windows in a pretty ordinary 20th century suburb.
At what point do we priorities conservation of older properties over energy consumption / use? I ask that reflectively, not with an agenda. It seems that we do have a huge issue with the quality of existing housing, particularly when it comes to energy efficiency and on-site generation. It will not be cheap - but, as is being discussed on the HS2 thread, what if we spent that bazillion pounds on insulating existing properties, building super efficient new ones, covering every roof with solar, changing some conservation area rules, making progress with tidal and wave power etc.
I know I am a dreamer - but something has to change and we need to find every mechanism we have to change it. As the real cost of not doing so is waaaaay more than 20% uplift in council tax...
Increase the standards for new builds when it comes to "energy efficiency and on-site generation" before worrying about knocking down old leaky stuff to replace them.
At what point do we priorities conservation of older properties over energy consumption / use?
Its a tricky one. I live in a 160 yr old listed tenement in the attic. I have insulated it a well as I can at huge cost and effort. If you paid someone to do it all now it would be many tens of thousands. A long time to get that money back. One of the issues is I am only allowed to put wooden sash and case windows in. Even the best double glazed ones are nothing like as good as a modern window and are very expensive.
It will not be cheap – but, as is being discussed on the HS2 thread, what if we spent that bazillion pounds on insulating existing properties, building super efficient new ones, covering every roof with solar, changing some conservation area rules, making progress with tidal and wave power etc.
I think there's a balance. I agree on some aspects, get rid of the planning rules that stop people retrofitting energy efficient insulation and heating systems, oh and adding solar to the roof. But there is an environmental cost to demolishing old buildings and rebuilding them in the extraction and processing of building material. Bricks and cement have an enormous carbon cost vs. domestic heating using gas and/or electricity. Timber frames are great, but then the amount of wood required would have it's own environmental cost.
If I could fit a modern, super insulated UPVC doors and triple glazed windows, add solar to the roof and electric hot water run off the solar, my gas consumption for heating would be miniscule. But since I'm not allowed to do the former, the latter is pointless.
This is timely I think.
https://www.moneysavingexpert.com/utilities/free-cavity-loft-insulation
If you're in council tax band A-D (A-E in Scotland/Wales) and your EPC rating is D or worse, you get free stuff like loft insulation. There's a checker for both on gov.uk, stick your postcode in and it'll give you all the ratings for you and your neighbours. (Various benefits remove the council tax banding requirement.)
At what point do we priorities conservation of older properties over energy consumption / use?
A neighbouring house is The Old Something-or-other, it has a round plaque on the wall from the local 'conservation area' stating that it dates back to "at least" the 1600s. But aside from the residents, would anyone really care if the block was knocked down? It's just a row of terraces in a mundane town in the North-West, it's hardly a tourist attraction.
If I could fit a modern, super insulated UPVC doors and triple glazed windows,
I find it strange (but not wholly unsurprising) that you can't change it internally. It's a house, not a stately home. No-one walking past is going to even notice let alone care if you were to fit double glazing behind the existing period windows.
If you’re in council tax band A-D (A-E in Scotland/Wales) and your EPC rating is D or worse, you get free stuff like loft insulation
If you have NO insulation.
If like us you have 25 year old dust instead of cavity foam insulation, they you 'have' it and don't qualify (and need to spend £7k 'removing' said dusty remnants).
If like us you have (had) 5omm of collapsed loft insulation from 25 years ago then you already 'have' it and don't qualify.
These schemes are right to focus on those who have NOTHING energy saving at all and lowest income - but we also need to look at the 'hard to treat' houses and get some support for that going...
Local Income tax: At least that is linked to ability to pay & can be as progressive as you like.
It's almost always going to end up regressive though on a larger scale.
e.g. Reading is statistically poorer than Wokingham next door. So in order to have the same services would need to pay much higher tax rates. Or the more likely outcome is that poor towns spiral into a decline while rich towns benefit from the opposite getting new schools, libraries, sports facilities etc whilst their middle class residents pay lower tax rates.
Addressing inequalities is better done over much larger populations.
I find it strange (but not wholly unsurprising) that you can’t change it internally. It’s a house, not a stately home. No-one walking past is going to even notice let alone care if you were to fit double glazing behind the existing period windows.
You can, I used to live in a Grade 1 listed house complete with 20ft ceilings. The (enormous) sash windows all had secondary sash windows behind them.
