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Tom's Tips 4: Only land owners should pay property taxes as they benfit from the increase in value



Win-Win for home owners

1 June 2024 The average house price in the UK is £282,000, and the average price rise recently has been 1.8%. or £5,000 per year. Council tax raises £47billion according to Office of Budget Responsibility this is equivalent to £1620 per household, this was an increase of£106 on previous year. 64% of households, 18m households lucky enough to own their own home. So home owners dont pay council tax!

 

The increase in property values more than offsets the council tax bill. In order make up the £20billion shortfall from the freedom from not paying from council tax for 10m households who rent, then for 64% or 18m households this would mean each homeowning household would need to pay an extra £1000 a year more an increase of 50%, which sounds considerable but when you consider that they have gained an average of £5000, in untaxed wealth not created by you but by the increased property values due to the location of your property. So homeowners are still winning. A political decision would be either to introduce over a four-year period to reduce impact or pay the difference when you sell the house and realise the capital gain.

 

Better still abolish council tax for everyone and replace with rent proportional to the value of the land, which only applies only to those who own the land not renters. More on that later

 

Note: All these figures are averages, detailed analysis may adjust the figures slightly but not weaken the case for change

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