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Council tax should be replaced with annual payment, think-tank says 

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Plans from a think tank for homeowners to pay an annual levy worth 0.5 per cent of the value of their home instead of council tax were today blasted as a ‘blunt tool’ which would ‘simply alter where the inequality is felt’.

The Labour-leaning Institute for Public Policy Research called for a ‘proportional property tax’ to tackle regional inequality – saying it was unfair that those who have benefited from soaring house prices should pay so little compared to the value of their homes.

Under their system, someone living in a house worth £1million would pay £5,000, which would almost certainly be greater than their council tax bill – meaning the policy could be seen as a so-called ‘mansion tax’, hitting those living in richer parts of the South the hardest. 

And Graham Taylor, managing director at mortgages firm Hudson Rose in Stroud, Gloucestershire, told MailOnline: ‘This feels like a blunt tool which, with the best of intentions, will simply alter where the inequality is felt.

‘It is a dangerous assumption that those with larger homes must have larger incomes. Many ‘prime’ areas today were not considered as such all that long ago. The issue of council tax does need to be addressed as its current form feels woefully out of date.’

Legal experts at Wright Hassall solicitors in Leamington Spa, Warwickshire, added: ‘This could be perceived as a tax on the South.’ 

As well as replacing council tax, the new levy would also replace the stamp duty which people pay when they move house.

The think tank said the move would lead to a fall in house prices of 3 per cent in London and other well-off places in the south. 

LOSER (BY £6,722) This five-bedroom house in France Lynch near Stroud in Gloucestershire is on the market for £2million with Whitaker Seager. The idea for homeowners to pay an annual levy of 0.5 per cent would see a £10,000 payment here.  The property is within the Chalford Parish of Stroud District Council in band G, giving it a council tax rate of £3,277.74

LOSER (BY £6,722) This five-bedroom house in France Lynch near Stroud in Gloucestershire is on the market for £2million with Whitaker Seager. The idea for homeowners to pay an annual levy of 0.5 per cent would see a £10,000 payment here.  The property is within the Chalford Parish of Stroud District Council in band G, giving it a council tax rate of £3,277.74

LOSER (BY £1,530): This four-bedroom detached house is for sale near Doncaster in South Yorkshire for £1million with Portfield Garrard & Wright. Under the system proposed by the IPPR, someone living in this house would pay a £5,000 levy. The property comes under tax band H in the Doncaster Council area, giving it an annual council tax bill of £3,470.42

LOSER (BY £1,530): This four-bedroom detached house is for sale near Doncaster in South Yorkshire for £1million with Portfield Garrard & Wright. Under the system proposed by the IPPR, someone living in this house would pay a £5,000 levy. The property comes under tax band H in the Doncaster Council area, giving it an annual council tax bill of £3,470.42

WINNER (BY £35)This three-bedroom end of terrace in Guildford, Surrey, is up for £500,000 with Seymours. The levy here would be £2,500. The property is in tax band E within Guildford Borough Council, giving it a council tax bill of £2,464.57

WINNER (BY £35)This three-bedroom end of terrace in Guildford, Surrey, is up for £500,000 with Seymours. The levy here would be £2,500. The property is in tax band E within Guildford Borough Council, giving it a council tax bill of £2,464.57

Robert Payne, director at Langley House Mortgages in Bristol, said: ‘The theory behind this is that those with more expensive homes have higher incomes and therefore can afford to pay more tax but in reality it is a lot more complex than that.

‘It’s true that people living in areas where property is more expensive are more likely to have a higher income but this is not relative to the amount of surplus income they have available.

‘Essentially, even if they have a higher income they are often faced with much larger mortgage debt and a higher cost of living, so it is unreasonable to throw further increased costs at those who may already be struggling financially.’

And Scott Taylor-Barr, financial adviser at Carl Summers Financial Services in Newport, Shropshire, added: ‘A tax based on property value has always been problematic – the value of your home is not always in line with the income you have to pay a tax.

‘Many residents in the South East, for example, who gained property via Right-To-Buy in the 80’s, are now sitting on some prime and very expensive real estate, but that doesn’t mean they have City banker size incomes to pay a sky-high tax bill based on their property’s current value.’

 

WINNER (BY £17): This detached part-thatch cottage in the Devon village of Broadhembury is on the market for £400,000 with Bradleys. It would have a levy of £2,000. It is within band D in East Devon Council, giving it a council tax rate of £2,016.68

WINNER (BY £17): This detached part-thatch cottage in the Devon village of Broadhembury is on the market for £400,000 with Bradleys. It would have a levy of £2,000. It is within band D in East Devon Council, giving it a council tax rate of £2,016.68

WINNER (BY £79): This four-bedroom house is on with Jump Pad in Newton-Le-Willows, Merseyside, for £300,000. The levy would be £1,500.  The property is in council tax band D within St Helens Council, giving it a council tax rate of £1,578.78

WINNER (BY £79): This four-bedroom house is on with Jump Pad in Newton-Le-Willows, Merseyside, for £300,000. The levy would be £1,500.  The property is in council tax band D within St Helens Council, giving it a council tax rate of £1,578.78

 

WINNER (BY £373): This two-bedroom detached house is for sale for £250,000 in Coalbrookdale in Shropshire, with DB Roberts. It would have a levy of £1,250. It is within band C in Telford and Wrekin Council which gives it a council tax of £1,623

WINNER (BY £373): This two-bedroom detached house is for sale for £250,000 in Coalbrookdale in Shropshire, with DB Roberts. It would have a levy of £1,250. It is within band C in Telford and Wrekin Council which gives it a council tax of £1,623

One of the examples looked at by MailOnline today was a five-bedroom house in France Lynch near Stroud in Gloucestershire which is on the market for £2million.

The idea for an annual levy of 0.5 per cent would result in a £10,000 payment – but the property is within the Chalford Parish of Stroud District Council in band G, giving it a council tax rate of only £3,277.74.

Elsewhere, a four-bedroom detached house is for sale near Doncaster in South Yorkshire for £1million – which would result in a £5,000 levy for the property. It is under tax band H in the Doncaster Council area, giving it an annual council tax bill of £3,470.42.

However, in contrast, looking at a two-bedroom detached house for sale for £250,000 in Coalbrookdale near Telford in Shropshire, this would have a levy of £1,250. It is within tax band C within Telford and Wrekin Council which gives it a council tax of £1,623 – a much higher figure.

Joshua Gerstler, founder of mortgage advisers The Orchard Practice in Borehamwood, Hertfordshire, said: ‘I am not sure how this is workable as there is no daily calculation of the value of your house.

‘Is it fair that if the value of your house drops 10 per cent, so too do your payments, but if it goes up your payments go up? Council tax should be based on the cost to provide council services and your ability to pay for these services, not the value of your house.’ 

But Rhys Schofield, managing director at Peak Mortgages and Protection in Belper, Derbyshire, said: ‘Personally, I think it’s an absolutely brilliant idea to start to tax those that have been fortunate enough to do very well out of property price rises in the last few decades.

‘It’s fair to shift some of the burden from the shoulders of young working people living hand to mouth who are now going to be even more stretched when Natural Insurance contributions rise. In reality, though, the net losers I imagine may well be core Tory heartland voters and turkeys don’t tend to vote for Christmas.’

Shreya Nanda, IPPR economist, said: ‘The housing market has been almost entirely responsible for growing wealth inequality since the 1970s.

‘Over this period, while consumer prices have increased by a factor of 11, house prices have increased a staggering 60 times. 

‘These gains should have been shared fairly across society, but instead they were captured by older, wealthier homeowners and landlords. 

‘Those who did not own property during the long house price boom have been locked out, and too many face steep rents, cramped flats, and eye-watering mortgages.  

‘A proportional property tax would instead ensure that these gains were shared more fairly across society.’

The IPPR said council tax was unfair because it is based on outdated property valuations, which means the amount paid on the nation’s most expensive homes has lagged far behind their soaring values.

If set at a flat rate designed to raise the same amount of tax as council tax and stamp duty combined, a proportional property tax of around 0.5 per cent could mean three quarters of households in England paying less than now.

Making the change would help tackle regional inequalities, with people living in areas with lower house prices likely to gain, compared to those in regions such as London and the South East where prices are highest.

The IPPR said it would also be fairer, with the best off paying more compared to the current system – under which the lowest earning households (by income decile) pay around twice as much council tax as the highest, as a proportion of their income.

The think tank acknowledged that there would be practical issues to address, including a new mechanism for redistributing the increased revenue from areas where property values are high, to areas where lower values will yield less tax than under council tax.

It calculated that a PPT would lead to the biggest house price falls – up to 3 per cent – in areas of London and the East and South East, while the 10 most affected areas, primarily in the North East and North West, could see rises of up to 11 to 15 per cent.

Last night a Treasury source said there were no plans to introduce such a property tax in the UK.

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Britain’s biggest homes for sale: Devon country house vs London mansion

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The biggest properties for sale on the open market in Britain – both in and outside of London – have been exclusively revealed by Zoopla.

The largest home on the property website is in Devon, in the town of Ottery Saint Mary, and at 22,211 sq ft it’s almost double the size of the 12,451 sq ft mansion in the capital.

Yet the price tag of the country house in Devon – said to be where Oliver Cromwell declared civil war –  is significantly less at £5.95million, costing just over a third of the £15.95million one in North London’s Highgate.

For £5.95m, you could get more than 22,000 square feet of country house with 21 acres of grounds in Devon's Ottery Saint Mary

For £5.95m, you could get more than 22,000 square feet of country house with 21 acres of grounds in Devon’s Ottery Saint Mary

By contrast, £16.95million buys a 12,500 square feet seven-bedroom mansion on London's affluent Courtenay Avenue

By contrast, £16.95million buys a 12,500 square feet seven-bedroom mansion on London’s affluent Courtenay Avenue

The seven-bedroom London pile is on Courtenay Avenue, which was recently named the second most expensive street in Britain and is close to Hampstead Heath. It comes with half an acre gardens – a sizeable chunk of land for a home in the capital.

But the Devon property boasts 21 acres, 10 bedrooms, parkland and woodland, and comes with what the estate agent describes as ‘the fascinating Cromwell Fairfax Room where it is believed Civil War was declared in the 17th Century’.

The average price of a home in Ottery, where it is situated, is £433,981, which is up £28,052 on a year ago, according to Zoopla.

By contrast, the average price of a home in Courtenay Avenue is £20,510,200, but that is down £108,741 compared to a year earlier, as buyers’ pandemic desire for the countryside tops demand for the capital.

We take a look inside both properties… 

1. Seven-bed house, Courtenay Avenue, London, £16.95million

The property is on a private gated road and boasts a luxurious interior with a large dining room for entertaining

The property is on a private gated road and boasts a luxurious interior with a large dining room for entertaining

The house for sale in London with the biggest square footage is in the north of the capital, on Courtenay Avenue.

Running parallel with the more famous Billionaire’s Row of The Bishops Avenue, Courtenay Avenue is an even more exclusive no-through road on the borders of Highgate and Hampstead, which was recently named as the second most expensive street in Britain by Zoopla. The £20million average house price there was only topped by Kensington Palace Gardens at £30million.

The Courtenay Avenue house extends across 12,451 sq ft, the equivalent of 1,156.7 square metres, and sits in just over half an acre of land. 

It has seven bedrooms, including a main bedroom suite that overlooks the landscaped gardens.

Inside, there is a swimming pool, gym, steam room and sauna, as well as staff accommodation.

The property has a price tag of £16.95million and is on the market via estate agents Bargets. 

The Courtenay Avenue home boasts a swimming pool, gym, steam room and sauna, as well as staff accommodation

The Courtenay Avenue home boasts a swimming pool, gym, steam room and sauna, as well as staff accommodation

Deep pockets required: The property has a price tag of £16.95million and is on the market via estate agents Bargets

Deep pockets required: The property has a price tag of £16.95million and is on the market via estate agents Bargets

The house extends across 12,451 sq ft, the equivalent of 1,156.7 square metres, and sits in just over half an acre of land

The house extends across 12,451 sq ft, the equivalent of 1,156.7 square metres, and sits in just over half an acre of land

The house has plenty of space with seven bedrooms, including a main bedroom suite that overlooks the landscaped gardens

The house has plenty of space with seven bedrooms, including a main bedroom suite that overlooks the landscaped gardens

Daniel Copley, of Zoopla, said: ‘Located on Courtenay Avenue, which was recently crowned the UK’s second most expensive street, this palatial property has an enviable location a stone’s throw away from Kenwood House and Hampstead Heath, as well as 24hr security.

‘The property itself is brimming with luxurious touches including a spacious walk in wardrobe, while the fitness suites offer the perfect place to unwind.’

2. Ten-bed house, Devon, £5.95m

This £16.95million house in Devon's Ottery St Mary has the biggest square footage of any home currently for sale on Zoopla

This £16.95million house in Devon’s Ottery St Mary has the biggest square footage of any home currently for sale on Zoopla

The property has an impressive dining room where Oliver Cromwell reportedly declared the start of the Civil War

The property has an impressive dining room where Oliver Cromwell reportedly declared the start of the Civil War

The largest house for sale in the country on Zoopla is in Exeter’s Ottery St Mary. It is called The Chanters House and extends across 22,211 sq ft, the equivalent of 2,063.4 square metres.

The living areas include The Great Library, which is more than 70 ft in length and is where poet Samuel Taylor Coleridge’s family created one of the West Country’s most impressive libraries,

Meanwhile, the dining room is said to be where Oliver Cromwell hosted a meeting of local people and declared the start of the Civil War in the 17th century.

A story to tell: The Great Library is more than 70 ft in length and was created by poet Samuel Taylor Coleridge and his family

A story to tell: The Great Library is more than 70 ft in length and was created by poet Samuel Taylor Coleridge and his family

The property is called The Chanters House and extends across 22,211 sq ft and boasts a large indoor swimming pool

The property is called The Chanters House and extends across 22,211 sq ft and boasts a large indoor swimming pool

The Grade II listed property has a massive 10 bedrooms, 11 bathrooms and a striking conservatory with a large seating area

The Grade II listed property has a massive 10 bedrooms, 11 bathrooms and a striking conservatory with a large seating area

There is also a billiards room, a conservatory, a swimming pool and a striking greenhouse.

The Grade II listed property has 10 bedrooms, 11 bathrooms and sits in more than 21 acres, including parkland and woodland that runs down to the River Otter. It has a price tag of £5.95million and is being sold via estate agents Knight Frank.

Zoopla’s Mr Copley said: ‘Chanters House is a true piece of British history, with links to famous figures including Oliver Cromwell and the renowned poet Samuel Taylor Coleridge.

‘The spacious interior has plenty of beautiful details including carved wooden ceilings and panelling, as well as a beautiful library with over 22,000 books. There’s also expansive grounds with a BBQ area and pool house.’

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Prosecution of former British soldier over Troubles killing defended

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Northern Ireland’s Public Prosecution Service has defended the decision to prosecute British army veteran Dennis Hutchings over a Troubles shooting.

Mr Hutchings (80) died in hospital in Belfast on Monday after contracting Covid-19, leading unionist politicians to raise concerns that the case against him had been allowed to proceed.

The former member of the Life Guards, had pleaded not guilty to the attempted murder of John Pat Cunningham in Co Tyrone in 1974. He also denied a count of attempted grievous bodily harm with intent.

Mr Cunningham, a 27-year-old with learning difficulties, was shot dead as he ran away from an army patrol near Benburb. People who knew him said he had the mental age of a child and was known to have a deep fear of soldiers.

DUP leader Jeffrey Donaldson had challenged the prosecution service over what new and compelling evidence led to the trial.

Deputy director of public prosecutions Michael Agnew said: “The PPS [Public Prosecution Service] decision to prosecute Mr Hutchings for attempted murder was taken after an impartial and independent application of the test for prosecution.

“The test for prosecution requires a consideration of whether the available evidence provides a reasonable prospect of conviction and, if it does, whether prosecution is in the public interest,” Mr Agnew said.

“Whilst a review of a previous no prosecution decision does not require the existence of new evidence, the police investigation in this case resulted in a file being submitted to the PPS which included certain evidence not previously available.

“In the course of the proceedings there were rulings by High Court judges that the evidence was sufficient to put Mr Hutchings on trial and also that the proceedings were not an abuse of process.”

Mr Agnew said the PPS recognised the “concerns in some quarters” in relation to the decision to bring the prosecution.

He added: “We would like to offer our deepest sympathies to the family and friends of Mr Hutchings, and acknowledge their painful loss.

“However, where a charge is as serious as attempted murder, it will generally be in the public interest to prosecute.”

“Our thoughts are also with the family of John Pat Cunningham who have waited for many decades in the hope of seeing due process take its course.”

Mr Hutchings had been suffering from kidney disease, and the court had been sitting only three days a week to enable him to undergo dialysis treatment between hearings.

He was charged with the attempted murder of John Pat Cunningham in Co Tyrone in 1974.

Mr Hutchings died at the Mater Hospital on Monday while in Belfast for the trial. Hours earlier, the trial had been adjourned for three weeks in light of his health.

Mr Donaldson said he had been shocked when the decision was taken to bring the case to trial. “He has been literally dragged before the courts,” he told the BBC.

“Dennis is an honourable man, he wanted to clear his name, he was prepared to go despite the risk to his health but I do think this morning there are serious questions that need to be asked of those who took the decision that it was in the public interest to prosecute this man.”

Mr Donaldson said Mr Hutchings’s actions had been investigated at the time.

“So it is not a question of this being something new, and therefore the question I have for the PPS is what was the new and compelling evidence that meant it was in the public interest to bring an 80-year-old in ill health on dialysis at severe risk to his health before the courts, and I think that is an entirely valid question that I am entitled to ask this morning,” he said.

Ulster Unionist Party leader Doug Beattie has called for a “full and thorough” review into the decision-making of the Public Prosecution Service. – PA

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How to value your home

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Since Revenue disclosed details of its property tax revaluation campaign back in mid-September, households around the State have started to fret about how much their home is worth.

Where just a few short weeks ago, people were talking jubilantly about how much the house across the road had sold for, now there is a fear that exuberant house prices will cause a sharp rise in property tax bills.

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