I supported the ‘poll’ tax because every adult capable of paying contributed to the services provided. My neighbours’ accommodate three adult generations and a fourth as children. They pay the same council tax as my wife and I do, alone in our house which cannot be fair.
However if we are to have a system based on property values, it should be fair. The top band is £320,000 at April to 1991 prices which according to the Nationwide house price index equates to £1.327 million today. I suspect there are more than half a million houses in the UK worth over £2million and many in London worth over £10 million. These households should be paying more. The Civil Service tends to over-complicate issues and talk of a national revaluation which would cost millions and result in many challenges.
There is a simple solution:
1. Create a new set of bands with the existing bands A-H being uplifted according to house price indices and several new bands above at say £2.5, 4, 10, 15 and 20 million. These would be uplifted each year in line with house price changes.
2. The new tax levels would only be paid the first time a house was sold protecting elderly asset rich, cash poor residents.
3. Householders would not want to undervalue their properties although there would inevitably be downward adjustment around the band breaks but any serious breaches would be picked up by HMRC district valuers, as happens now with stamp duty.
4. Precedent exists with stamp duty – when it goes up it only comes into force when a house is sold. This scheme, over time would produce a significant contribution to repaying the enormous deficit and would cost little.
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