Re Larry Elliott’s article (A property tax based on annually uprated values would be a gamechanger, 9 April), a proportional property tax (PPT) is indeed fairer than council tax. In particular, it reverses the bizarre taxing of occupants rather than owners. But it wastes an opportunity to improve the whole UK property tax system. According to the Office for National Statistics, land value represents 60% of the UK’s wealth, and 70% of the land is owned by 1% of the population.
Concentrated land ownership is the driver of the UK’s gross wealth inequality and housing misery for so many. Why should vast country estates and farms be inherited tax-free or bought by billionaires? No one made land – it is our common wealth, and a land value tax (LVT) is how it can be fairly shared.
The Fairer Share campaign has suggested a £100-a-month maximum increase above council tax as part of its PPT proposal. It would be more progressive to instead set an LVT rate equivalent to the current lowest council tax rate (Westminster’s) and increase that as “levelling up” progresses. For a revenue-neutral outcome, rates could be set initially by each local authority to obtain the same income as council tax. LVT should replace all UK property taxes, not just council tax and stamp duty.
Carol Wilcox
Secretary, Labour Land Campaign
Larry Elliott rails against the unfairness of council tax, but proposes a solution with even more unfairness. The purpose of council tax is to pay for council services, which have little or nothing to do with the value of your house or the land it sits on.
I have my roots in London going back generations, and have been forced to move out due to property prices, ending up unwittingly in an equally expensive area, and having paid handsomely through large mortgages for a modest house, while friends in other counties live in huge properties for which they paid relatively little.
I am indifferent to the value of my house as it does not benefit me at all while I am alive – a proper inheritance tax (IHT) would deal with that issue – so I rather resent the suggestion that I should pay a large tax on its unearned and unwanted value to pay for increasingly third-rate council services, while those in larger properties elsewhere with a greater call on services are asked to pay less.
Jeremy Scroxton
Thames Ditton, Surrey
If a proportional property tax based on the value of housing was introduced, a rough calculation shows that the amount that we pay here in Ickenham would rise by 60% to 70%. Householders in Bolton with a house valued at £150,000 would pay about 73% less.
Council tax is raised to pay for local amenities – garbage collection, street repairs, libraries etc. I assume that these costs are similar wherever you live in the country. My local authority would see a huge rise in revenue by at least 60%, whereas in Bolton they would now be looking at revenue reduced to around 25% of what it was. How to make up this shortfall? Presumably those in favour of a PPT would argue that the winning local authorities should subsidise the losing ones.
How does this affect us if we cannot afford to pay the extra tax? Larry Elliott suggests downsizing. If we did that, when we moved from our beloved home to a tiny flat, we would still be paying three times as much tax as the Bolton resident. How is that fair?
Linda Buckingham
Ickenham, London