Havering Council Tax: Is It Too Low?

Council tax is loosely based on the value of property. Because of political cowardice, the 1991 valuations haven’t been revised. Havering has seen significant increases in house prices since then. The financially ruinous, but politically adroit, freezing of council tax in Havering wasn’t sustainable. It must be revised upwards.

After a quick look at Rightmove,a house on Harrow Drive, Hornchurch seemed like a good starting place. It’s on sale for £1,400,000 (August 2020). In 2012, it sold for £655,000. The untaxed profit on this property is £745,000 or £94,375 per year.

The band H council tax for this house is £3,592. This means they’re paying 0.25% of the value of the house. In 2012, the council tax was £3022 or 0.46% of the value of the house at that time. Council tax has reduced by 0.21% over the last eight years. 0.21% doesn’t seem much does it? But on £1.4 million it’s an additional £2,940 per year.

Merely maintaining the value of the 2012 council tax means this house in Harrow Drive should pay £6,532 per year. That isn’t an increase,it simply maintains the property tax relationship of 2012. If this principle was used across the entire housing market in Havering the borough wouldn’t be flirting with bankruptcy.

Sources

https://www.gov.uk/council-tax

https://www.havering.gov.uk/info/20000/council_tax/168/council_tax_bands_and_bills

https://www.rightmove.co.uk/property-for-sale/property-95369375.html

2 thoughts on “Havering Council Tax: Is It Too Low?

  1. It would mean linking council tax to house price inflation as opposed to the more normal RPI. I can see lots of ways to develop this critique but my finger has gotten tired.

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    1. Thank you for your comment.

      I was using the house price inflation as an illustration. Basically it was a comment on (a) the ludicrous council tax freeze that Osborne inflicted and (b) the cumulative impact of the freeze.

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