Reeves plan to tax houses over 500k PART TWO

Yes, the example given on the radio by the guy who made the proposal was someone buying a £600k house would be paying £540/year instead of £20,000 stamp duty up front.

You have absolutely no idea what the yearly charge would be. In the article they talked of it being dependant on how far over £500k the house was. So an ascending scale and on top of council tax which will increase inline with inflation and be called something different.

It is a tax on the buyer not the seller.

Probably daft question but how will they determine how much your house is worth? Is it simply what you bought for it (and in which case won’t this stop people moving) or will they predict how much a home is worth based on market value?

And if they are taxing things on perceived market value doesn’t that open them up to tax more on market value too?

Surely the tax will also discourage home improvements too - already incredibly expensive and then a double whammy by more tax when you sell due to the added value. So not only stalling the housing market but a knock on effect on all sorts of other industries too

The additional tax is on the 200k over £500k
Where did you read these figures ?
There's a lot of conflicting information out there I could equally be wrong

So as opposed to paying stamp duty once which is often factored into the one large occasional process they want to shaft you yearly to make this charge part of your regular outgoings. One would assume they will also recalibrate your house price yearly so any improvements you do will see you charged more and if houses prices go up, so will the charge. It’s a little like an ever tightening zip tie.

Doesn’t that pretty much make it a tax on London and SE?

If you already live in the house, you won't be paying any more tax on it for being over £500k. If you move house and buy another for £700k, you would pay the new annual tax of a few hundred pounds instead of stamp duty of £25,000 when you make the purchase.

Other articles state the £500k threshold being sited is nonsense and will be much higher

Theoretically they would. Just every year whilst they live there. So rather than a one off tax on sale it’s a bigger bill spread over the years

Theoretically they would. Just every year whilst they live there. So rather than a one off tax on sale it’s a bigger bill spread over the years

Noooooooo !! My council tax is going to be £4k next year. That plus a property tax - I read about £4k again on £700k house (and that’s a flippin’ 80s box where I live) - £8k a year? aaaaargggh!!

Nobody would under the proposed system.

Do I understand correctly that this would replace council tax? Or would it be in addition?

And those in rented - particularly social housing - would be exempt from any new “council” tax and wouldn’t have to pay anything at all? That would be utterly unfair.

But doesn’t everybody pay stamp duty when they buy a house?

Taxing the sellers is ridiculous.
My story:

DH and I completed on our current home earlier this year. 425k, so whilst not at the 500k mark, we're not too far off it (and therefore it is a possibility that we could be there at some point). We paid £11,250 in stamp duty (not first time buyers).

4 bed detached - our forever home. DH works from home, and so uses the smallest bedroom as his office. 2 spare bedrooms - 1 double, and 1 single (could fit double bed and nothing else in the room, or a single bed with wardrobe and desk).

We have unexplained infertility. We are considering adoption - we are currently pre-stage 1 with this, and so very early days. We understand that the adoption process may not work out for us.

DH and I have discussed both approval and non-approval of adoption. If we are approved, and wr get a child, we will stay put. This is a lovely home and perfect for a child to grow up in.

If we do not end up with a child, we have also discussed downsizing in 5 - 10 years. We are able to cover the mortgage and all other costs for our current house, but if it ends up being just the two of us (a very real possibilty), we could buy a 2 bedroom house pretty much outright, and obviously have the advantages that come with being mortgage free.

But- if it costs us to SELL (after we've already paid stamp duty on this property), we may decide to stay put. At the end of the day, we can afford our current 4 bed, and if it's going to cost us to move, why should we? (I don't know the ins and outs of this new tax yet, but asse that any stamp duty we would pay to buy a 2 bed would be less than this new tax to sell a 4 bed).

Doesn’t that pretty much make it a tax on London and SE?

Other articles state the £500k threshold being sited is nonsense and will be much higher

What usually happens is the government leaks information about the next raft of tax rises pre-budget and when it happens we are grateful it’s not as bad as we thought so don’t react to handing more money over.

I just can’t see that they will make moving part of the process as they know directly they do that people won’t move. It makes more sense to me that they will go after the second home owners and holiday let owners first and all our holidays will go up. They’ll no doubt implement a version of the mansion tax and alongside that they will do a watered down version of the stamp duty change.

This is well worth a listen (starting from 1:05) for an explanation of how this works. I have seen a lot of misinformation on this thread. People getting upset about things that are not proposed. For example this tax will not apply to people who paid stamp duty when they bought the house.

https://www.bbc.co.uk/sounds/play/m002h13y?partner=uk.co.bbc&origin=share-mobile

For reference the only area in the country where the average house price is over £500k is London. So for the vast majority of people they would only be paying if they live in a more expensive than average house for where they live.

Good for them! I’m absolutely delighted there is someone out there keeping the economy going and using shops.