Has anyone read anything about the Labour Party's commitment to Land Tax?

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    Has anyone read anything about the Labour Party's commitment to Land Tax?

    If so, can you share it because, from the little I've read, I'm worried.
    I believe that both Labour and Liberals are committed to replacing Council Tax with Land Tax.
    And I think this has very frightening implications for buy-to-let landlords.
    I've looked at how Land Tax works on rented property in Sydney and if that way of calculating was applied here:
    1) the owner of a flat valued at £500,000 would be liable to pay £2,300 a year
    2) The owner of a flat valued at £850,000 would be liable to pay £8,000 a year
    3) The owner of a flat valued at 1,000,000 would be liable to pay £10,000 a year.
    I suspect that if John Mc Donnell is our Chancellor then he will impose much more penal rates than those.
    Indeed I've read that the Labour Party would consider this calculation:
    a) Assess the value of the property b) take 55% of that value c) calculate Land Tax as being 3.5% of b)
    So the owner of a £500,000 flat would pay around £9,000.
    Gulp!
    Does anyone have any insight into this issue?




    #2
    Without wishing to enter the contentious debate between the political factions I thought the article published last May in the Daily Telegraph puts some light under the ramifications associated with the Labour plans on Land Tax.
    29 MAY 2017 • 10:30PMCouncil tax bills would treble for middle-class homeowners under Labour plans to introduce a so-called “garden tax” on the value of land, it was claimed last night.

    The Labour manifesto contains plans for a Land Value Tax to replace council tax, which would hit people with gardens the hardest.

    The manifesto contains no detail of how the tax would be applied, but the Conservatives claim tax on the the average family home would go up from £1,185 to £3,837 per year, an increase of £2,651 or 224 per cent.

    Opponents of the tax say it would cause house prices to plummet, putting homeowners at risk of negative equity and forcing families to sell off their gardens to developers to lessen their tax burden.

    There is no doubt that the current Council Tax System is outdated with Council Tax Bands needing revaluations but even here the consequence of significant increases in the levels of Council Tax paid by homeowners and tenants alike would make it a potential vote loser but like everything in life , everyone will have their own views.

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      #3
      Yep, there's never been any formal plan announced to determine how much it would cost. Some of the figures were pulled from a report which suggested some possible figures but what happened in a lot of cases is that the newspapers reports tried to make out that the LVT would be in addition to Council Tax, rather than a replacement. They also forgot to point out the suggestion that alongside LVT other taxes would be reduced or abolished - raise one tax, lower/abolish others.

      The LVT is based on land value so that's estimated as roughtly 50% to 60% of the property value. The 0.85% on residential / 3% on business is suggested as being based on that value, the land value. It bring the figures down far below those in the papers. Average UK house value is £250,000 or so, so the land is £125,000. A residential LVT using the figures would be 0.85% of that, circa £1,100 and £3,700 on a business property. There would,as always, be winners and losers.
      Previously served 10 years as a council tax advisor with a local authority but now self-employed with my own council tax consultancy.

      If your local authority disagrees with any aspects of your council tax claim, as they are free to do so, a Valuation Tribunal appeal may be required.

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        #4
        But of course (assuming the total collection of Council tax is the same) -- people living in expensive houses in Chesterfield would benefit. At the moment people living in a £500K home in London pay far far less tax than people living in the same value home in a less-affluent area.

        So to that extent it seems perfectly fair to me to link council tax to the value of property rather than to the value of property relative to your local neighbours.

        The problem of course is that the intent is not be to make tax fair, but rather to collect a lot of tax from ordinary people to fund all sorts of ill advised schemes, "benefits" and scams. The hardest hit will be all those silly kids in London with their 95% mortgages who vote for these Corbynite buffoons in the first place -- and they deserve what they get. They don;t realise that they are rich and hence the target.

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          #5
          if based on the land value, people living in high-rise flats would pay very little (assuming building footprint is divided by total number of flats)... I assume ?

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            #6
            Originally posted by rfph1 View Post
            if based on the land value, people living in high-rise flats would pay very little (assuming building footprint is divided by total number of flats)... I assume ?
            Unless they charge each flat dweller the whole footprint of the flat?

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              #7
              There's some momentum behind this.
              I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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                #8
                In Florida ( USA) the state government imposes a property tax on houses in northern parts of Miami and many house owners must pay annually around 2% of the market value of the property. The maintenance cost for keeping the grass cut in the neighbourhood can be over $120 per month ( what you may pay for band C rated council tax. in E & W )

                If you are resident and voter in Bermondsey you should contact your local MP ( Mr Doyle ) and get him to lobby against the idea as a vote loser for labour candidates.

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                  #9
                  There does need to be some change in how property is taxed.
                  Either don't tax it at all, or tax it fairly.

                  Personally, I'd review the current council tax bands, and associate the tax with the actual value, and tax growth in value on disposal (although at a lower rate than CGT).

                  If a fifth of households rent, any property tax based on ownership rather than occupation is going to be the best kind of tax possible, a tax on other people.
                  When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                  Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                  Comment


                    #10
                    Does anyone remember the attempt to impose a poll tax around 1990 ?

                    It nearly started a national revolution against Government and was changed to council tax banding on property values around 1990-1991 .

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                      #11
                      Always a good technique.

                      Introduce something absolutely terrible, and then, following huge unrest, replace it with something merely terrible - which seems like a victory for the protestors.
                      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                      Comment


                        #12
                        Do we assume that landlords are regarded as operating business premises and therefore liable to the 3%?

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                          #13
                          I don't see why we need to tax property surely it would be fairer to impose an equal tax on individuals, which I think is where the poll tax left off!

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                            #14
                            Originally posted by DPT57 View Post
                            Do we assume that landlords are regarded as operating business premises and therefore liable to the 3%?
                            That would appear to be the case in the example scheme.
                            Previously served 10 years as a council tax advisor with a local authority but now self-employed with my own council tax consultancy.

                            If your local authority disagrees with any aspects of your council tax claim, as they are free to do so, a Valuation Tribunal appeal may be required.

                            Comment


                              #15
                              The land tax idea would run into problems in UK because under the leasehold system , the flat owner is only owner of a lease .

                              The freehold land is owned by the landlord ( freeholder ) and many are incorporated in the tax haven countries and are set up to escape the hmrc tax net..

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