World's most expensive apartments: only 9 in 62 paid council tax

One Hyde Park, the world's most expensive apartment building, is a notorious den of tax avoidance. The building is located in London's Knightsbridge, between the Serpentine and Harvey Nichols, and has 62 apartments, each worth millions of pounds. Only nine of the 62 owners pays their ~~full~~ council tax, and most of the apartments were sold without any stamp duty (a tax on home purchases) being collected through a dodge whereby each apartment was owned by a company over which the buyers assumed control, so that the apartment itself never changed hands.

Karen Buck, the Labour MP for Westminster north, said she expected the council to act quickly to recoup the tax from One Hyde Park's residents. She voiced concern that the super-rich in London were not paying their way, saying: "When council spending is under unprecedented pressure, it is scandalous that residents in luxury apartments can avoid their share of council tax liability. It sometimes seems as if the more money you have the less you are required to pay."
A council may apply to a magistrate for a warrant to imprison a council tax debtor if they are refusing to pay but have the means.
The revelation follows claims by Liberal Democrats that up to £750m is lost every year to the exchequer when house purchases are hidden behind off-shore companies.

Only nine pay council tax in enclave for super-rich

I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.

MORE: class war • london • one percent • ripoff • tax cheat • uk

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Well, they didn’t get to be super rich by playing by the rules.
- bcsizemo
  
  Well technically they are playing by the rules. They just happen to have enough money to use ALL the rules, even in combinations that their creators didn’t think of.
  
  I’m pretty sure you are getting into that level of “rich” when you can start answering the question of why did you do that with “because I can”.
  - lvdata
    
    You have old school computer hackers who can make a computer do things the original manufacturer never conceived of. The rich use the legal system and the tax systems the same way, with a lot of creativity and thinking outside the box. The current legal system both in the US and UK could probably come up with a law that says P=NP. The legal/tax system needs the revision when this happens. Who here knows ALL the laws they are subjected to?
    - Palomino
      
      You’re right.
      
      Ignorance of the law is not an excuse for not becoming rich.
  - http://lemoutan.blogspot.com/ Lemoutan
    
    Plus the fact that the rich own (sorry, sorry, I mean lobby don’t I) the rule writers.
- http://twitter.com/slavey Robert Slavey
  
  If they didn’t play by the rules (laws), would they not be under arrest? They make and know the rules, that’s how they are able to benefit from them.
Joel Phillips

World’s most expensive apartments; world’s cheapest-looking logo?
- Antinous / Moderator
  
  World’s most expensive apartments; world’s cheapest-looking logo?
  
  I just drove by a block of grody, old, harvest gold inside and out, 1970s apartments in my neighborhood today and saw that they have a glittering new chrome sign that describes them as ‘urban apartment homes’. Maybe somebody mixed up the signage.
yadayada

Occupy One Hyde Park!!
Just_Ok

Are they non-smoking apartments?
phisrow

Dear Fellow Citizens and Other-than-corporate Persons,

Please keep in mind, at this difficult times, that chavs in hoodies are society’s true enemy.

Thank you for your cooperation.
- taras
  
  I don’t differentiate between poor chavs and moneyed chavs. They’re all scum.
  - Cowicide
    
    There’s rich chavs?
Guest

Christ, what a bag of assholes. Someone should superglue the doors shut.
- phisrow
  
  Poetic justice might be better served by ensuring that services not paid for are simply not provided. We wouldn’t want a bunch of benefits cheats getting fat on the labor of good honest people.
  
  I’m sure that the owners of some of the world’s most expensive apartments wouldn’t mind if the Metropolitan Police Authority and London Fire and Emergency Planning Authority simply started ignoring them…
  - Guest
    
    Good point. I say cut off the sewer first. I’d bet 30 well placed sacks of concrete (a la Zodiac) in the right manholes would do the trick.
  - AlexG55
    
    Surely ignoring fires in an apartment building would be a bit harsh on the apartment owners who did pay their taxes?
  - Palomino
    
    For some of you who are responding below, this is a nod to: ~Gene and Paulette Cranick, of South Fulton, Tennessee, US, lost their home after firefighters were ordered by bosses not to extinguish it (for not paying a $75 “subscription” fee). ~Telegraph. (Meaning, reported in the U.K. too)
http://twitter.com/RaggleFock Raggle Fock

I bet those 9 feel awfully foolish about now.
Hans

“SAS-trained doormen?”

Holy monkey army, Batman. Police beat common people for protesting, but they are powerless to ensure a government official can reach the front door of a wealthy tax-cheat?
- disqus_F42m9Ppx3k
  
  Welcome to David Cameron’s UK. Quote “We’re all in this together.” Yeah…
That_Anonymous_Coward

“It sometimes seems as if the more money you have the less you are required to pay.”

I am guessing that Karen Buck is new to the whole politics thing…
elix

People are at all surprised? I’m sorry for being cynical, but this is about as surprising as “oxygen is a necessary component of human life.”

That being said, I would love to see a magistrate send them to prison for a week or so — and normal prison, not rich-peoples’-holiday-resort prison (I don’t know that the UK has those, mind you). Bruise their egos a bit since there’s no justification to fine them a sizable enough portion of their fortunes (like 90% to make it count) to financially punish them for such a “minor” crime such as evading taxes.
Aram Jahn

“We don’t pay taxes. Only the little people pay taxes.” – Leona Helmsley, spilling the collective Id of the 1%, circa 1988
http://twitter.com/Prentiz Richard Coates

Its worth remembering that, at the moment, in the UK, you only pay full council tax on one property – you get a discount of between 10-50% (decided by the local council, 10% mostly) on second homes. Hence its probably no surprise that many of the owners here own property elsewhere too. BTW, the coalition government is abolishing the discount. So, I wouldn’t necessarily be too concerned about the council tax situation, given the word full here.

The stamp duty is the big issue here – and loads more cash. I think I’m right in saying that this “you’re buying a company, not a house, hence no tax” routine hasn’t been tested in court yet. I guess there’s a strong chance that the Inland Revenue might be pursuing these people for the cash – otherwise, for the small cost of establishing a limited company (£50?) everyone – not just the megarich, will be able to avoid paying stamp duty…
- someguyyouvenevermet
  
  Boingboing’s headline should be changed. The word “full” should not be included because the people in question are not paying an of their council tax.
  
  The article linked to states that only 9 residents are paying ANY council tax on the property. 4 are paying full council tax and 5 are paying the reduced rate as a second home. The other 53 are paying nothing
  - http://twitter.com/Prentiz Richard Coates
    
    Fair play, that’ll teach me to not read the article. Still, the council tax pales into insignificance besides the stamp duty. On the cheapest (!!) £3m flat, it would be £144,000, which is going to be around 70 years council tax. For the most expensive, stamp duty would be £5.4m…
EH

One HyldePark
pigpen23

shit, my mind was blown the first time i went to hyde park in chicago! granted, i was coming from ashland and garfield, but still, i’ve seen some swank hoods.
Gary Gibson

The non-payment of stamp duty in this case is particularly ironic given the origin of that tax, as I once had it explained to me. As I understand it, it was originally levied at house purchases by the wealthiest percentage of the country some decades ago. Since then, house prices for the rest of us have caught up with and long surpassed the original threshold of that tax, which hasn’t been shifted in all that time, and as a result the distinctly n0n-wealthy are required to pay what was originally designed to spread the wealth (there are now, however, exemptions for stamp duty in certain relatively economically deprived areas).
- Aneurin Price
  
  > Since then, house prices for the rest of us have caught up with and long surpassed the original threshold of that tax, which hasn’t been shifted in all that time
  The lower threshold for stamp duty was doubled in 2005, so it is just possible to get a small house in a reasonable area without paying stamp duty.
  
  Yes it’s still too low, and should be replaced with a progressive taxation system rather than this absurd threshold basis, but at least it’s better than a few years ago when you’d have to pay stamp duty on a cardboard box in a crime zone.
zephyr1

How cheap do you have to be to spend £3 million on a flat, and then refuse to pay the £1300 a year in council tax? Are they just ideologically opposed to giving any of their money to governments? Maybe they just have huge private shopper and limousine bills that eat up all of their wealth and they really can’t afford council tax.
- Palomino
  
  That’s not the problem. They know no one will come after them. Take a middle class family in Brighton who doesn’t pay their (far lower) taxes, one time; They get hauled off very quickly.
  
  There’s got to some kind of secret handshake or password in government, this process of not paying taxes it too flagrant & easy.
TheHowl

This just in: rich people can afford smarter tax attorneys than the government can.
Ahkenhaton

And this is happening in a country where the government is cutting public services, reneging on the long-established retirement rights of teachers, nurses and low-paid public employees, preaching the gospel of ‘austerity’, still blaming the former government, failing to create the promised economic growth, facing what amounts to a general strike next week; a country where youth riots in the summer destroyed parts of inner-city London; a country that has spent billions on bailing out bankers whilst doing nothing to restrain their excesses; a country whose government – senior members of which are multi-millionaires – was not voted for by the majority of the electorate. “It’s the rich what gets the pleasure, it’s the poor what gets the pain…”
Mark Cresswell

“Only nine of the 62 owners pays their full council tax”

That suggests the rest pay…but not the full amount. Could they perhaps be getting the single-persons allowance (if only a single person lives in a property then they get a discount). I don’t see a problem with this…but I’m not consumed with class envy or prone to hate rich people as a default position like Cory seems to do.
- William George
  
  I’m not … prone to hate rich people as a default position like Cory seems to do.
  
  You should. They hate you.
- someguyyouvenevermet
  
  Read the linked article the others are not registered at all and pay no council tax
- Guest
  
  No, but you ARE prone to make excuses for people fully capable of explaining -themselves-, aren’t you?
  
  I’m not going to pretend to be jealous of your superpower.
- davidasposted
  
  Maybe if their behavior wasn’t so often contemptible and anti-social, regular folks would have fewer reasons to feel the way we do about them.
thudson

Many homes in NYC are sold in the same way — an underlying corporation owns the building (or pays the mortgage on it) and the residents purchase shares that come with proprietary leases guaranteeing exclusive access to their units. It sounds like Hyde Park residents are forming one-unit coops.
Cowicide

Let’s face it. They are BUMS. If there was a toilet tax, they’d shit in buckets to avoid contributing to society.
- rrh
  
  Can we make the bucket toilet-shaped? And hook it up to the running water and sewage system? But still legally define it as a “bucket?”
  - dragonfrog
    
    Only if you use a privately maintained sewage system that pipes the shit directly to somewhere poor people live – then you’re not freeloading off a publicly maintained sewage treatment plant, don’t you know…
DavidN6

On the other hand you avoid capital gains tax if you own your main residence, but not if your company does.
asuffield

On the other hand you avoid capital gains tax if you own your main residence, but not if your company does.

Indeed, and this is actually the main reason why people do it: CGT is only payable if you make money on the sale, and if you make a loss then you can book it as a deduction from your CGT for that year. It’s more affordable than stamp duty, which is an up-front cost.

Rather than changing the law to make stamp duty apply to everybody, we should be changing it to make CGT apply to everybody and scrap stamp duty. It’s a fairer system, if universally applied. (Of course, then it can’t be used as a “kick the rich” tax, but I don’t really believe those are a good idea)
- Guest
  
  All taxes are ‘kick the rich’ taxes. Get over it, it’s fair and you’re whining.
  - asuffield
    
    All taxes are ‘kick the rich’ taxes. Get over it, it’s fair and you’re whining.
    
    Rubbish. Most taxes are paid by the middle classes, and that statement was profoundly silly when we’re talking about how rich people don’t pay stamp duty.
    - Guest
      
      Did you just say that most taxes are paid my middle class people as though that had anything to do with my point that you obstusely missed? You really put the t back in rolling,
http://twitter.com/JosephBelBruno Joseph BelBruno

Paying taxes sucks anyway.
- EvilSpirit
  
  Not half as much as people who won’t pay their taxes.
http://blog.tysonwilliams.com/ Tyson Williams

It is called: “One Hide-Taxes Park”
atimoshenko

Laws: rules you have to obey unless you have enough money to hire someone to find you a way around them.
Palomino

A Dichotomy:The calloused, Hard Working class Vs. the Calloused, hardly working class.

You can almost always tell when someone is hardworking. A wealthy rancher or farmer may be wearing a $5000 pair of cowboy boots, but their hands are rough and calloused too. And their working environment proves it. You see the land, the livestock; you can tangibly view their wealth.

But this kind of wealth is a cancer. These people are mosquitoes, they’re feeding off the oxygen-rich blood of the middle class. It’s time for us to flex our muscle and watch them explode.

I don’t care if someone is rich. I care of they want the rest of us (and government) to make it easier for them to be rich. It’s not a question of being wealthy, it’s about how someone can buy wealth, and what they are buying it with.
Palomino

I wonder what the elevator ride is like, if the 86% point & snicker at the 14% who paid. “You know the Jones, I heard they pay their taxes….Isn’t that rich? Damn martyrs!”
http://openid.aliz.es/Rule-of-law Rule Of Law

The point is that they did play by the rules.. Your govt helped make those rules.
- Palomino
  
  The problem is, the rich may not be the actual government, but they are actively governing, that’s where the real power is.
ashabot

Seems the uber rich enjoy their own elite form of socialism.
http://dasteepsspeaks.blogspot.com/ Matthew Steeples

One Hyde Park, though I’m sure to the taste of many, caused chaos for the locals during construction and looks no better than Bowater House: http://dasteepsspeaks.blogspot.com/2011/11/taxingly-pointless-carbuncle.html
http://dev.null.org/acb/ acb

Letting the ultra-rich not pay taxes is more symbolic than anything. Given that their income is mostly returns from stocks and bonds, the amount of council tax paid would be mostly lost in the margin of error, However, once the little people start banding together and demanding that the titans pay taxes, even acquiescing to a symbolic peppercorn sum would set a precedent that the titans are not untouchable. Governments know this, and keep it in mind when seeking the favour of the titans, who could theoretically up sticks and move to Switzerland, Dubai or some floating Galt’s Gulch on the high seas, or, more simply, take a few hundred million out of petty cash and spend it on getting the more sympathetic other guy elected.