Buckingham Palace, Romford*

Obviously Buckingham Palace isn’t in Romford but let us suppose that, magically, it is transposed into suburban London. Apart from placing Romford on the internationl tourist route and bringing unheralded wealth to Romford market, what else would happen? Would there be a vast increase in Council Tax payments? After all, Buckingham Palace is worth hundreds of millions of pounds and it stands to reason that, as Council Tax is a property tax, the council should benefit. Unfortunately the Council Tax is designed to hit the poor harder than the rich and there would, in fact, be no discernable increase in Council Tax receipts.

Given that Buckingham Palace is worth hundreds of millions of pounds, it may come as a surprise that it would be rated for a Council Tax of just £3,000 p.a. This is the maximum that can be levied on any property in Havering. It might be imagined that as £3,000 is the maximum, the minimum would be tiny fraction of that figure. The minimum Council Tax is set at one third of the maximum. So a property valued at £150,000 or less is charged at £1,000. It is a sleight of hand to describe Council Tax as a ‘property tax’. Council Tax is a regressive tax designed to hit the poorest hardest. Proportionately, the rich pay the least.

As of July 2014 (the time of writing) there are 24 houses for sale priced above £1.5 million** in Havering. All of these houses are in band ‘H’ for Council Tax purposes and pay £3,000 p.a. This so- called property tax is 0.2% of value. £1.5 million is my entry point for this discusion and so the 0.2% is a statistical floor. A typical house, at the bottom of my spectrum is a nine- bedroom house on a quarter of an acre. A further current example is a five- bedroom house, with eleven acres and an indoor swimming pool. The most expensive house for sale (July 2014) is valued at £3.7 million**, or a Council Tax of 0.08%.

Council Tax is grotesquely unfair. Properties valued at more than ten times ‘affordable’ house prices pay only three times more Council Tax. This is classic example of a regressive tax system. State sponsored unfair tax burdens are corrosive of civilisation, loosening social cohesion and promoting division. Therefore I feel that the reform of Council Tax should be a principal objective of a reforming government.

Tax should not be considered a burden, tax is a civic duty for all citizens. In 1904, Oliver Wendell Holmes made what I regard as the definitive statement on this when he said, “Taxes are the price we pay for a civilised society.”

* Romford is in the outer London Borough of Havering
** £1.5 million is $2.57 million at July exchange rates; £3.7 million is $6.33 million
*** An ‘affordable ‘ house currently on sale is a one bedroom flat priced at £150,000 and pays £1,000 Council Tax or 0.67% of value, which is pro rata eight times more than that on a £3 million home

(Chris)

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This entry was posted in Economics, local politics, Politics and tagged , , , , , . Bookmark the permalink.

4 Responses to Buckingham Palace, Romford*

  1. Peter Baxendale says:

    Excellent,Chris.Now all we need to look for is a reforming government in the future.

    • odeboyz says:

      This unfairness flows directly from the political cowardice of government who have not had the five yearly revaluations thereby avoiding the wrath of the press. Naturally local government finance has been wrecked because of this cowardice. 23 years of house price movements is now irretrievable for local property taxation purposes.

  2. Pingback: Hornchurch and Upminster Labour | Osborne’s Council Tax 2% Increase

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