Rat and Mouse
Fri
16
Mar
New Statesman takes country to task over property tax squeamishness

There's something about the value we attach to our homes that seems to generate an especially strong emotional response when the words "tax"and "property" are used together.

You reckon? Well… it's the biggest single investment most people ever make (by a country mile), we spend a third of our lives paying for it, we live in it/have kids/die in it, we watch other peoples' homes being used as weird porn on the television and we can still lose it, easily, should circumstances turn against us. We pay for it with money taxed, hard, at source, and we pay direct tax on it when we buy it, annual tax on it to local government and further tax every time we maintain it.

Not enough.

The New Statesman champions extending and improving (making fairer) the council tax system so that it becomes a kind of mansion tax for everybody. A people's mansion tax. Apparently it's fair. "Unearned wealth" needs taxing.

Anyone who bought their property in 1994 didn't earn that 250 per cent increase in the value of their home between 1994 and 2008.

Nor, unless they sold it in 2008, did their wealth increase as a result of it in any meaningful way.

Mindful of criticism that property taxes raise money from the most illiquid notion of wealth, and that simply owning a house that has gained in value doesn't necessarily mean a homeowner's in a position to find the funds to pay a new tax, the New Statesman has a solution:

To deal with any hardship faced by the asset rich but income poor [in other words, the poor], taxes could be deferred until the property was sold, or we could have a rebate system as we do now for those who can't afford to pay their council tax bills.

So, plough all your wealth into your house, and you won't even have to pay the tax. Alternatively, pay at the end… and exactly how is that different to capital gains tax, which actually could be calculated fairly and accurately on an individual basis?

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