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We know where you live

This is a weird story. From The Mail on Sunday, 2nd December 2006:

Estate agents secretly selling home details to tax inspectors

Snooping: tax officers can now find out exactly what your home is worth.

Government officials have been given access to a vast database of properties, revealing their sale prices and detailed floorplans, under a deal with the website Rightmove.co.uk.

The site, run by four of Britain’s biggest estate agents, contains information on 800,000 properties – and the contract, which runs until 2008, also gives inspectors access to old records.

The Valuation Office Agency – the department of HM Revenue & Customs that allocates a council tax band to every home in England and Wales – will be able to use the data to find out about improvements such as double-glazing and conservatories that may increase tax bills.

What’s weird is this: Property sales in Britain now involve a direct return to the Revenue as part of the new Stamp Duty Land Tax regime. And the Lands Registry has a definitive record of all such transactions, now online, which ought to be accessible to the Revenue. Unless the transaction is registered, you haven’t bought the property. And a house’s recent, actual, sale price is going to be pretty conclusive evidence of its valuation.

So why pay a website whose coverage can be at best partial? Either HMRC is wholly incompetent (possible). Or they think transactions are being under-declared in the hot market (difficult in most cases, when two sets of solicitors and bankers are involved). Or the Mail on Sunday is missing the point and HMRC is not targeting sellers but renters and landlords. Or this is a publicity exercise, and HMRC is engaging in its favourite hobby: public intimidation of the public.

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15 comments to We know where you live

  • H Lewis Allways

    The point, I suspect, is that often non-arm’s length transactions in land are charged to tax as tho’ they took place at market value. “Market Value” is notoriously difficult to determine and when the District Valuer is called upon to check the taxpayer’s valuation, one of the things they will do is to look for recent arm’s length transactions of a similar nature to the non-arm’s length one.

    Having access to these records would prolly aid in that. Chartered Surveryors called upon to defend a valuation usually do the same thing.

    I am inclined to think that this is a non-scandal that appeared attractive to the Mail because it was about two of its favourite subjects; house prices and tax. I am surprised they didn’t work Princess Diana’s death in there somehow.

  • Manuel II Paleologos

    “Asylum threat to house prices”
    Possibly my favourite ever Mail/Express/Whatever newspaper headline.

    See also article in the last Sunday Times covering a grisly murder near where I live in Kingston. The focus is not that someone was savagely beaten to death in their own home after being stalked home on a bus. The focus is that she lived in a £600,000 house, with the subtext wondering what on earth someone so posh was doing travelling on a bus.

    Mrs II Paleologos, being a foreigner, finds this our most disturbing national trait, after the one about paying for your own drinks at weddings.

  • ian

    I suspect this is a non-story with a combination of journalistic ignorance and the Mail’s desire to pillory the government combining to create an irresistible force.

    The Mail is only a fraction above the comics like the Sun and the Star in its journalistic standards so I never expect too much from them. After all – why make things up about the present shower (or those waiting in the wings for that matter) when there is so much good material lying around?

  • nic

    I concur. From personal experience, I have found the Daily Mail is quite capable of fabricating sources to boost the line of an article. Not to say it isn’t a good newspaper in some respects. It is just VERY good at reflecting the fears of its readership perfectly rather than facts on the ground!

  • R.Halstead

    I don’t think the prejudices of the Mail explain the motivation of HMRC. They may know the value of properties from the Land Registry, but the VOA want to increase council tax based on specific improvements to the property. This information could be mined from the Rightmove database.

  • Midwesterner

    In my part of the USA we just went through a state ordered property revaluation. During these, assessors explore your house from top to bottom, in and out (and your out buildings,too) in order to make sure that they are taxing every possible thing at the highest value than can assign. They use realitor (housing agent?) data to make sure they are using the latest and highest local values. Ours had been appraised as part of an unrelated (different tax) appraisal and by taking those in to the assessor, I was able to get him to split the difference between what he decided it was worth and what the appraiser decided. A few months difference in the appraisel dates gave him enough leeway to still raise it.

    The primary reason for looking at realitor data is to get the most current estimated values of property. The principle reason for wanting to know this non-transactional value is to charge a property tax. Y’all may want to brace yourselves for a good ole Amurrican style property tax if you don’t already have one. Whatever they choose to call it.

  • My reading of this was that it is the access to floorplans and details of home improvements that they’re after. The net result will be that if the previous owners have put in central heating, the next owners get a higher council tax bill.

  • Midwesterner — this goes on in the USA? In the Midwest? I’m surprised I haven’t heard about any of these snoops getting shot. As a rule I don’t let strangers into my house.

  • Midwesterner

    I wish they were strangers. We see all too much of them. Once you have a tax, you get the entire apparatus that goes with it.

    The lastest example of the extremes it is reaching is in the campgrounds.

    By tax code, trailers under 400 square feet are not taxed as property, since they are vehicles. (Even though some of them rarely move.) In an effort to increase tax revenue, the new interpretation is that when these seasonal campers build porches, if those porches are attached, the entire unit is taxed as a house. If they are not attached, the porch (and garden sheds, etc) is still taxed as personal property (as opposed to ‘real’ property), . A simple bead of caulk between the porch roof and the trailer is enough to turn the trailer into a ‘house’. The previous assessor was willing to consider it unattached if he could slide a business card between them, so pushed in foam seals were okay. THe new assessor seems unwilling to accept that distinction.

    We don’t own property in the USA, we rent it from the government. And this is one category in which we are in worse shape than you guys by most measures.

  • Midwesterner

    And I should add, that as a US citizen who knows the smell of vigorous property tax revenue generation, this move in the UK has that sort of stink to it. Beware.

  • Midwesterner

    Er… “generation” should be “confiscation”.

  • RAB

    Hells teeth Mid, that’s dreadful!
    But it’s no good telling us to beware because the same thing has been proposed here. IE an army of prod nozed bastards with clipboards poking through your house.
    I always thought that that one might prove to be NuLabs poll tax moment, but I am genuinely astounded that this already happens in the land of the free.
    So let me get this straight. The Council Tax banding is centralised in the Valuation office Agency right? Not down to individual Councils.
    Well it seems obvious to me that it is the ground plans and improvements they are after, without the need to hire an army of prod nozed bastards who will only piss the entire electorate off. Purchase prices are easily available after all.
    Slightly tangentally, there was an Irish gent on Mayo last week talking about Land and who owns it.
    I came in in the middle of the interview and didn’t get his name or the name of his book/s .I thought immediately that if this bloke had been my Land Law lecturer, I would have done much better than scrape a pass.
    Who owns the most property in the entire world, personally?
    Well Her Maj. Apparently. She owns Canada, Australia, two thirds of Antarctica and on and on.
    The guy was fascinating. So if anyone out there knows who he is and the names of his books, please let me know.

  • Midwesterner

    Oh but RAB, they will still hire those PNBs. Aside from the need to employ more civil ‘servants’ the property owners will learn how to avoid leaving such an obvious digital trail.

    In the US, most all jurisdictions require building permits for any remodel over a pittance. This information is then used to recalculate your estimated sale value for tax purposes.

    The inspections are because so many people figured out how to beat the system. I’ve found the best way to get a not-inflated assessment is to thoroughly acquaint myself with all of the property’s flaws. Learn the ages of heating etc equipment, know all the sags a cracks in the foundation, know the age and condition of the roof, and on … THen, accompany the assessor and make sure that he notes every single flaw that may reduce the value of the house.

    If you don’t let them in to inspect (not home, etc.) they measure the outside and then make guesses. These guesses don’t have to be based on anything already on file, but are rather the intuitions and estimations of the assessor. One guess how often they guess low.

    It’s my guess that after the debacle of the poll tax, these taxes are a ‘third rail’ for your politicos. Much like our social security system. They have probably been treading very lightly in this area compared to other big brotherish activities. It is sounding like that may be coming to an end.

  • Julian Taylor

    I often find it quite bizarre how something can be posted on Samizdata just as it happens to me. I received some weeks ago a ‘demand’ (more of a threat actually) for £2300 for rates on 700 square feet of space in West London. I challenged the valuation on the grounds of small business and that nobody had completed an actual footage survey of the premises.

    What I received back was a highly detailed assessment of the entire property which I note was actually carried out by the landlord’s estate agent with a copy forwarded to the Valuations Office in Westminster. The actual valuation does not appear to be based upon sound mathematical calculation but upon the usual semi-literate London estate agent ‘guesstimate’ of property worth. Naturally I am now appealing the entire process by which the VO arrived at the figure they are levying.

  • Paul

    .Not only your house, grounds and outbuildings but furniture too.

    This is an old and ancient tax, and in the living past very modest, maybe $100 or less each year. However that is changing, naturally for the worse.

    I have a friend who owns a bar in Massachusetts. Most everything in the bar requires a ‘license’. Hence on the first of the year he is down at the town office handing over $15, 000 for ‘licenses’. Jukebox, license. Pool table, license. Sell cigarettes? License. Have some packages of chips? License. Serve prepared food? License. And to add insult to injury, another set for everything for being open on Sunday. Separation of state and church don’t you know.

    So the pattern as in criminal law is to make what was one a single crime, or tax, into many little crimes and taxes. Then raise the prices

    Someday people will just give themselves to the state as slaves just to be free of the torture of the state’s machinations.