Reeves plan to tax houses over 500k PART TWO

The difference is in good times you can pay off more on your mortgage and eventually pay it off
A yearly tax instead of stamp never gets paid off. It’s just a lifetime tax

So austerity was pointless then? Where’s all the money gone? And I notice that’s not real terms, it takes no account of inflation.

The difference with stamp duty is that it is a known amount and if you borrow to pay it you know how that will cost you annually etc

once the property tax has been introduced and the principle established you then have uncertainty over the amount as you don’t know if a government will come in and ramp it up etc. perhaps I just distrust governments when it comes to tax rates

Stamp duty is about the properties value though
It’s in itself not a wealth tax and to tax the way you are suggesting just means sellers will be savvy with their borrowing
It would be expensive to run aswell

Yet here it states government spending has increased each year for last 15 years

https://www.statista.com/statistics/298465/government-spending-uk/

Because it's essentially punishing people for daring to own a house worth a certain value. The underlying assumption is that people that 'own' houses worth £500k are somehow inherently wealthier than those that own a house worth £499k when we knowthis isn't the case. It ignores regional variance, needs of family units and those that aren't geographically mobile. It is designed to disproportionately certain areas and regions.

All that equally applies to Stamp Duty.

More money would make a huge difference. Austerity stripped them to the bone. Public services were as different as the world 20 years ago.

If you can buy a £600k house you either have a lot of equity or a very good income. Only 20% of homes are over £500k so it surely does indicate a degree of wealth.

I don’t want more services but I do want better services. However I don’t think throwing money at them makes a difference

the world has changed a lot in the last 20 years but most public services haven’t or have spent stupid amounts of money trying

I'm not "weirdly pleased" about anything.

Either we face up to the fact that better services=more tax or we don't.

Either we face up to the fact that high house prices are ruining the economy or we don't.

If there is anything I am pleased about it is the focus is finally coming onto housing wealth, and that there is an opportunity to raise tax there.

I don't consider wanting better services and lower living costs for everyone as "weird".

I suppose some people might consider people who want to preserve their own housing wealth at the expense of good services and the ability for everyone in the country to be able to afford their own home as "selfish".

If there is any consolation for people who are not in favour of increased taxation on housing, for years successive governments have talked about doing stuff like this, and all of them have bottled it.

Labour seem to be gaining a reputation for talking a good game but actually pulling out when the chips are down. So I'm not holding my breath they will actually do anything like this - we can but hope.

@BIossomtoes houses will be depreciating assets. Many houses have not actually increased in price over the last 20 years in real terms. The next 2 decades, there will definitely not be an increase in price in real terms, so houses will most definitely be a depreciating asset moving forwards. There are no winners in the current market conditions. Everybody will need to pay more in some way or other, with the wealthiest paying proportionally more it seems with Labour.

That’s a bonkers statement. Do you understand how much inflation has added to people’s monthly outgoings? Electricity going up. Water bills going up. Food costs up 4.9% and you honestly think people aren’t going to notice another £540 a year disappearing through their hands. Costs are increasing year on year. This country is becoming very expensive to live in and now they are talking about another large yearly bill and you think it’s nothing. Your finances must be in VERY good shape.

How much is your house worth out of interest? Your parents house? Your brother or sisters house? Your aunts house? Your children’s future house? Even if your house is under the threshold you are saddling other people with this debt and seem weirdly pleased about it.

It was in the paper that was linked. I’ll attach it again.

It’s the same as buying a car in cash compared to monthly leasing.

Not if you get a very low interest rate. Spending your cash on a depreciating asset and simultaneously losing the interest on that cash isn’t particularly financially astute.

I actually think it would be great if stamp duty or its replacement took account of the buyer's capital/equity, rather than sale price. That way you stand more chance of taxing wealth gained from the property market.

Something has to be done in this country re housing. I bought a house in 2004 for 105k which was 5 years old (owners bought is new build for 40k). I made a 40k equity but then went into negative equality in the crash. Bought again and now in my forever home (I think).

Maybe I have a different viewpoint as I grew up on benefits in the 80s and in foster homes. Housing should be a right, not an accumulated wealth.

I still live in a deprived area but in an area of mixed economics. People are more than welcome to move to our region but I don’t think they will. Even my headteacher (who was taught at the school I teach at) lives 39 miles away.

Some people may be trapped by where the live but there are also people who choose to live in a certain postcode. I teach where I live so I know my job is harder than that if a teacher in a leafy suburb. Swings and roundabouts.

Well no, that was my point.
Someone that owns £150k property outright is wealthier than me, and not paying £2k each month to a lender.

It is incorrect to think of everyone living in £500k houses as wealthy. That is the price for a normal family home where I live.

The only way this will be net for the Treasury (and I doubt they will do anything this drastic just for net, it will have to be significant revenue generating), is that everyone moves on to a property tax, with some gradual rebate of stamp duty paid in say the last 5 years only. The onward report is just an opinion and what becomes policy often looks different.

this will encourage downsizers, and keep the housing market more fluid, whilst keeping the country on a leash by forcing us to pay an annual tax just to live.

But how is that worse than stamp duty? That is also a tax based on the value of the house you are buying but it starts at a much lower level.

Both go up in increments. The 0.54 % is for houses between £500k and £1million. I don't know what the higher bands are. I guess ultimately the money will be made up because as people buy houses and shift onto the new system they will be paying regularly so each house above threshold will be generating that income forever whoever lives there instead of unpredictable irregular lump sums.

So what's the point then?

Also how can it raise the same amount if a large proportion of people won't pay stamp duty under the new system and those buying houses worth over £500k will be paying peanuts over many decades to even pay the equivalent of what they would have paid in stamp duty. Do they really think loads of people are going to rush to buy multi million pounds houses and incur this ongoing tax? Surely people will just wait it out and hope it is repealed like it was in Australia.

Because it's essentially punishing people for daring to own a house worth a certain value. The underlying assumption is that people that 'own' houses worth £500k are somehow inherently wealthier than those that own a house worth £499k when we know this isn't the case. It ignores regional variance, needs of family units and those that aren't geographically mobile. It is designed to disproportionately certain areas and regions.

If overall the vast majority of people will be better off then the government will either lose money or they will place a disproportionate burden on those that have a house that is valued over the threshold. We need to get used to sharing the burden as a country. Everyone paying a bit is far better than pretending that you can place extremely high taxes and this will be enough. We know from experience that this doesn't work. Look at the non dom tax etc.

The chap who proposed the idea said it had been calculated to make the same amount of money as stamp duty. It is not intended to make more.

Remind me how this will actually earn the government more money in the short or medium term? Remind me where the pot of money is to cover all the receipts we would ordinarily gain on stamp duty for the years immediately after the introduction of this policy? Is Reeves seriously proposing we borrow more money to essentially give a large proportion an exemption from stamp duty?

How is it punitive though? Seriously!