Tag: USA property tax

Havering’s Council Tax: A Reverse Wealth Tax

Council Tax is based on 1991 property values. The eight bands, ‘A – H’, reflect those valuations, which haven’t been revised for 35 years. One outcome is that band ‘H’ houses pay a lower percentage Council Tax than band ‘A’. Council Tax is a reverse wealth tax.

Havering’s band ‘H’ Council Tax is £4,849.32.1 At the other end of the scale a band ‘B’ house pays £1,885.85.2 Council Tax was meant to be a property tax, which is absolutely not the case now.

There are many houses in Havering priced at £1m+, some of which are not in band ‘H’. Rightmove is advertising a house in Hornchurch for £3.9m.3 It’s in band ‘H’ and the Council Tax is £4,849.32. £4,849,32 is 0.12% of the price. This tiny amount isn’t even a ‘rounding error’. Simultaneously Rightmove is advertising a band ‘B’ property for £190,000.4 Their Council Tax is 0.99% of the value of the property. They pay eight times more than the band ‘H’ house in percentage terms. Council Tax means the poor subsidise the rich.

If the Band ‘B’ 0.99% Council Tax is used as the default, there would be sharp increases for expensive houses. A flat rate percentage Council Tax is a pure property tax. To equalise the Council Tax at 0.99% would level the playing field and end the subsidy that the rich receive from the poor.

Using the two houses that illustrate this blog, the Band ‘B’ house stays the same. This is absolutely not the case for the property valued at £3.9m. Their Council Tax increases from £4,849.32 to £38,610 p.a. This stonking increase is a vivid statement of the grotesque unfairness of the 1991 Council Tax banding system. Can you imagine the cries of horror of those who have this increase inflicted on them? Yet 0.99% is exactly what the poor are paying and it is equally unaffordable for them.

A percentageCouncil Tax is a fair property tax.

Conclusion

It will take enormous political courage, by Andy Burnham, to reform Council Tax. The losers will be the rich who can manufacture ‘outrage’ in the media. Meanwhile councils creak towards oblivion.

Addendum: Reforming Council Tax

There is nothing Keith Prince can do even if he wanted to. The point of this blog is to give a Havering context to the debate about Council Tax reform.

Notes

1 Council Tax bands and bills | London Borough of Havering

2 1 bedroom flat for sale in South Street, Papermill House, 363 South Str, Romford, RM1 I tried to find a band A property and couldn’t.

3 8 bedroom detached house for sale in Freeman Way, Emerson Park, Hornchurch, RM11 Accessed 16th July 2026

4 1 bedroom flat for sale in Grenfell Avenue, Hornchurch, RM12 Accessed 16th July 2026

Havering’s Council Tax and the USA’s Alternative

Council tax reflects property values in the 1990s. The promised five yearly value reviews never happened because of political cowardice.

Property tax is reviewed annually in the USA, “…The amount of tax is determined annually based on market value of each property on a particular date.”1 New Jersey has the highest rate at 1.89% and the lowest is Louisiana’s 0.18%.2 21 states are above 1% and then the range is between Louisiana and Florida’s 0.97%.

So what?

The benchmark used for this blog is Maryland, whose tax rate is 0.87%. They are at the USA’s mid-point property tax rate. Havering’s average house price is £451,000.3 Using Maryland’s 0.87%, the council tax would be £3,923.70 for an average house, instead of Band D’s £2,313.4,5

Detached houses in Emerson Park average £1,125,079. Their effective council tax is 0.41% or less.5 In Havering, high value houses are under-taxed under the American property tax system.

Council tax is a failed property tax, which is political dynamite. Havering’s Band H houses would have a council tax increase from £5,161 to £9,788 if Maryland’s rate was used.6 Havering’s financial woes are 30+ years old. The financial crisis was created by Conservatives and maintained by cowardly successive governments.

Council tax is a sick joke benefitting the rich.

Addendum: Louisiana’s 0.18% property tax

Louisiana is *Third World* in many ways. Life expectancy is 72 years7 and literacy is 72.9%.8 If Louisiana was a country it would be failed state. It is an example of low tax levels destroying society. (A £3m house in Havering has Louisiana levels of property tax rate as a percentage.)

Notes

1 Property tax in the United States – Wikipedia

2 Property Tax Rates By State 2025 – Tax-Rates.org

3 Housing prices in Havering See also Havering Housing Market | Price trends and market breakdown

4 Council Tax bands and bills | London Borough of Havering

5 House Prices in Emerson Park Two houses are for sale at £3m+ and several at £2m+, which reduces the percentage that council tax represents.

6 A £3m house would pay £26,100 council tax in Maryland instead of £4,627 in Havering.

7 Louisianans’ life expectancy is lower than national average – Axios New Orleans In Britain it’s 87 years Life expectancy calculator – Office for National Statistics

8 Louisiana Literacy Rates – Studyville Literacy in Britain is 99% Literacy Rate in UK Statistics 2025 | Illiteracy Rate UK – The Global Statistics