An influential group of politicians and economists have proposed that the stamp duty and housing tax be abolished and replaced with an annual wealth levy on housing that would hit the wealthiest hardest.
Bright Blue, the think tank that published the report, suggested that a new annual proportional property tax (APPT) should be introduced. The APPT would seek to increase the government by the same amount as existing property taxes, but more closely reflect home values than the existing system which includes 1991 housing tax assessments.
Do you think that the stamp duty and the council tax should be replaced? If so, what do you suggest as an alternative? Read on for the best talking points from our readers, and share your own perspective in the comments section at the bottom of this article.
‘A property tax that hits the south of England disproportionately is unreasonable’
@ Neil Thomson:
“While revisions to stamp duty and council tax are long overdue, I don’t think a property tax that hits the south of England disproportionately is fair or reasonable.
“The London and South East tax subsidy is already too high and is already subsidizing the other three home countries and the north of England to level the program.
“The tax take on the south of England has grown disproportionately on income. Making it worse with property taxes is punitive and puts an additional drag on life and work in London, as the capital has been hit hard by the pandemic. Ministers need to think again. “
“ We need more housing, not more taxes that drive up the cost of housing ”
“I paid stamp duty on my property, which was important. Why should double taxation be considered fair?
“We need more housing, not more taxes that drive up the cost of housing. These people are living in a thought bubble, not in the real world.”
‘No government would have any incentive to prevent house price inflation’
“The biggest problems with any property value based tax that I can see are firstly maintaining a realistic valuation, and secondly that no government would then have any incentive to prevent house price inflation – in quite the contrary. “
“ Either we believe in a proportional tax system or we don’t ”
@ Andrew Ryan:
“A tax raid on the property wealth of the south seems like a good idea to me, given that the current system is ‘regressive’ and ‘distorting.’ Either we believe in a proportional tax system where the rich pay more or we don’t. not.”
“The current system is very, very regressive”
@ Alice Taylor:
“I paid property tax based on the value of the house when I came to Texas. It is a much fairer system. The obsolete strip system here in the UK doesn’t take into account changes in values as neighborhoods go downhill and when they do It certainly doesn’t take into account the condition of the house or outside factors like neighbors or views, which affect the value.
“The current system is very regressive and a poor person living in a terraced house which is a slum pays the same as the rich neighbor who has the highest quality interior.”
“ It’s a double whammy for anyone improving their home ”
@ Andrew Richards:
“If the annual tax is to be based on the value of the property, then it’s a double whammy for anyone who is improving their home and already paying VAT for the lien improvements.
“The value of properties is also determined by the market, so we are now in a period of prosperity with values increasing by more than 10 percent, along with the new tax, no doubt.
“Anyone who expects the new tax to drop when property values drop is cheated.
“Many older people will be living in expensive homes for which they have saved and paid for over the course of their lives. Likewise, their incomes will generally be much lower after retirement.”
“ It would be suicide for the conservatives ”
“Changing the current rules would be suicide for the Tories. Anyone whose property value was bought under the current rules would feel uncomfortable. For example, I paid huge stamp duty when buying my house, why should I pay more taxes after I have already paid the stamp duty? “
“ Let’s not hit even harder those who are having trouble paying their mortgage ”
“A lot of people have to live in a particular region because of the nature of their jobs. Why should people who live in a modest house in a good neighborhood pay more tax than someone in a large property in a not-so-good neighborhood?
“A lot of people have trouble paying their mortgage in a good neighborhood near work. Let us not hit them even harder with an ill-conceived tax grab.“
“ To embark on a whole new scheme is madness ”
“The housing tax is a poor system, but replacing it with a tax raid on southern land wealth would create massive increases for low-cost housing.
“The country needs to pay off its debts, I agree, but to embark on a whole new system is folly. There needs to be more thought, with a hint of common sense added.”
“ The cost of living in the South East is already pushing people to their limits ”
“The cost of living, especially home ownership, in the South East is already pushing hardworking people to the limit. We don’t need additional taxes based on already overpriced housing and higher living costs.
“ Designing this fairly is much harder than people think ”
@ Alan Crawford:
“The big problem is that the many people who have bought recently, who have made increases to minimize the number of moves and therefore minimize stamp duty over a lifetime, are effectively taxed twice.
“Designing this fairly is a lot harder than people think. At a minimum, you’ll need a carefully designed cone based on a multitude of factors. It’s not impossible, but it will require serious economic analysis. . “
“ Many European countries have had it in place for decades now ”
“The current system has undoubtedly lost its way. Owners of very expensive property in London paying much less than many in modest value properties in much poorer areas. This is not a problem. property value tax in any form.
“I quite like the idea of a property value tax in the sense suggested. Many European countries have had it in place for decades now and it seems to be a much fairer system.”
“Why not have a logical income tax?
“A 25 percent reduction in council tax is, in my opinion, a step in the right direction, but it does not go far enough.
“A property tax based on the value of the house is a backward step as far as I’m concerned. Unless an adjustment is made for simple occupancy, I’m sorry, but that’s just plain wrong. should she only pay the same tax as her neighboring house where two people are employed? I don’t get double the services so why should I subsidize better-off households?
“Likewise, why would I invest, say, in a conservatory if it means that the property’s value goes up and, therefore, my tax year after year, just because of the improvement?
“If radical tax restructuring is needed, why not have a local income tax that at least protects homeowners with below average incomes? Homeowners receiving a state pension would pay little while those with several times the average wage would pay more. “