Labour's UK Sea View Tax Condemned

by Jason Gorringe, Tax-News.com, London

03 August 2009

Have your eye on that country cottage with views over rolling meadows or a place by the seaside? Then be prepared to be taxed for the pleasure as a result of plans under consideration by the UK government, it has been claimed.

Despite the government’s recent denials, new information has come to light showing that a review of the way dwellings are taxed for the purposes of raising money for local government is well underway, and that attractive features that add value to a home, such as sea or country views, the addition of patios or conservatories, and the proximity of public transport, are forming the basis of the tax.

Under the current Council Tax system, which funds the provision of local services in the UK, taxpayers are charged based on the value of their home on April 1, 1991, when the system was set up. The valuations are split into eight bands, and the amount of tax paid rises according to the assessed value of the property at a level set by each individual local authority. However, the system has no mechanism taking into account the huge rise in house prices since 1991, and is frequently attacked as being ineffective and unfair. Currently, the lowest band (Band A) relates to properties valued up to GBP42,000, and the highest band applies to properties worth more than GBP320,000.

The current Labour government supposedly shelved a revaluation study in 2005, but according to documents released under a Freedom of Information request, the project is very much still alive and kicking and contains proposals that are certain to set pulses racing in Middle England. For this reason, the results seem likely to be kept back until after next year’s election, in the unlikely event that Labour is returned to power, that is.

According to the opposition Conservatives, the documents show that government inspectors have been busy recording various homely features and a huge database of such information will be used to form the basis of future council tax banding. Some 100,000 homes have already been logged for their scenic views and GBP13m has been spent on the revaluation project since 2005.

Caroline Spellman, the Shadow Local Government and Communities Secretary, said there is now “cast-iron proof of a council tax revaluation by stealth.”

“Gordon Brown’s council tax inspectors have been caught red-handed preparing the way for massive tax rises on Middle England after the election, to fill the black hole in Britain’s ruined public finances,” she raged.

“Only Labour would think of taxing people for looking out of their own windows,” she quipped.

Spellman said that a Conservative government would scrap the plans and abolish the right of inspectors to enter homes.

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