Council tax, stamp duty or a home value tax?

“COUNCIL tax and stamp duty should be scrapped and replaced by a new annual levy based on the value of people’s homes, a powerful think tank has said.

The radical plans put forward by the Institute for Public Policy Research (IPPR) would see households pay yearly property taxes based on the current market price of their home.

It argued the move would help reduce wealth inequality between those who own a home and those who don’t.

The think tank claimed housing is currently “undertaxed” relative to other assets, distorting investment behaviour and contributing to inequality between homeowners and renters.

A property tax rate of 0.5 per cent would mean an annual tax bill of £1,243 for the owner of an averagely priced UK home valued at £248,611, the IPPR said.

The think tank claimed if the new property tax was set at 0.5 per cent it would raise at least as much as current council taxes. …

Carys Roberts, senior economist at IPPR, said: “Council tax is a regressive tax as it falls disproportionately on those with lower incomes and wealth.

“It’s also outdated, as it’s based on valuations that have not been updated since 1992.

“A new new property tax would be far more progressive, and would effectively capture increases in house prices in a way the current system does not.”

Property owners have seen their wealth and income grow, while rising numbers are locked out of home ownership and must pay increasingly high rents, according to the IPPR.”

https://www.thesun.co.uk/news/7448976/property-tax-scrap-council-tax-stamp-duty/

One thought on “Council tax, stamp duty or a home value tax?

  1. And how do you create a consistent way of measuring market value which is:

    a. Entirely objective, especially if you take into account decorative state etc.
    b. Not open to everyone appealing the valuation
    c. Not open to manipulation

    etc. etc. etc.

    This think tank needs to engage brain before making such stupid suggestions.

    They also need to consider the consequences of such an approach. You would be dis-incentivising decorating your property or doing internal renovations which might have a knock-on on the painting and decorating market and DIY trade.

    There is one way, however to force people to be honest – which is to allow everyone to set their own valuation, but allow anyone to buy the property at valuation plus 5% with a veto option to increase your valuation and paying back taxes for 10 years plus a 50%. This would incentivise people to make their valuation slightly over the market value to avoid someone buying out their property from under them. But this also assumes that the average person who just wants to be honest is intelligent enough to understand the system and set their valuation correctly – and they probably aren’t which then opens up a whole new opportunity for unscrupulous people to go around buying up undervalued properties.

    Like

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