Council authorities up and down the UK have been trying to control council tax rises in recent troubled economic times. The idea was that councils would use reserves from previous years to cushion the blow of the increased cost of services although unfortunately this has not really worked out. Austerity has been the name of the game for some time now with councils forced to cut back significantly on public services. However, council tax rises are back on the agenda and property owners are concerned.
There is a massive variation on proposed council tax rises across the UK with some creeping into double digits while others remain at or around inflation. This will certainly become a political hot potato in the days and weeks ahead because of the impact on so many areas of society. There will also be an impact on the property investment market with yet another increase in costs which many investors will struggle to cover.
Public services for all
Unfortunately for those owning higher value properties it seems as though they will become the cash cow of the future, again, as they are an easy target. This does prompt the very controversial argument about public services for all. Why should somebody in a relatively expensive house pay more for their public services than somebody in a smaller property?
Many will argue that each individual should have access to the same public services for the same price and their relative wealth should not even come into it. While we take it for granted that those living in high value properties should “pay more” if we take a step back and look at the situation from a distance, why do we take this for granted?
Is the council tax system fair?
There is no one definitive answer to this question because so many different people look at the situation from a very different angle. Perhaps we need to look at how councils spend the tax they receive from homeowners and whether indeed we all receive value for money. It is very easy to milk the property market with increased council taxes but whether it is helpful to the long-term prospects of the property market is debatable. This added layer of cost should also be taken into consideration against the growing need for private rental properties across the UK.
Yet another layer of expense
The property market is becoming an ever greater influence on the UK taxation system making it one of the most expensive property markets in the world. When you take a step back and look at the situation from a distance, it is amazing to see the performance of UK property in the last 30 years or so when you bear in mind the additional costs introduced by the authorities. The problem is that property investors and those with high value property assets are seen as easy prey for the political elite who are looking to curry favour with voters.
Is this fair? Will this ever be reversed? Unfortunately there are no signs of a reversal in this ever increasing tax take from the property sector.