Reeves plan to tax houses over 500k PART TWO

Because you don’t live in the South East of the country. How is this news to you? We’ve recently come back from a holiday in the East Midlands and couldn’t believe how quiet all the places we went to were. We are so used to being hemmed in. You go anywhere near us and it’s packed. We were so confused. If you are unlucky enough to be born in the south east, grow up in the south east, have family and friends in the south east and niche employment in the south east….. then guess what? You tend to live in the south east and have to pay a bloody great big mortgage on your normal sized property in the south east 🤦🏻‍♀️

Women with kids didn’t have the benefit of free childcare. Their options were limited due to lack of affordability. It’s only now that that is being addressed to a certain extent with 30hours free childcare ( and not everyone can get that either)

There was also a more sexist attitude to family life and even in 2000 when I had my first it was a rare site to see a dad dropping off or picking up at nursery. A rare site to see them at sports day. That is changing now but one only has to see threads on mumsnet to see who still caries the bulk of the burden

honestly do not get this thing in UK politics that pensioners and ring fenced from any sort of discussion. It's a huge cost on society but any mention of that is seen as a personal insult to old people.

Only current ones though, fine for future ones to wait till 70 to get a state pension.

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).

The vast minority of family homes in the South East are over £500k. We are not in London but you would struggle to even find a 2 bed house for less than £500k here. And that’s within 20 miles of where we are.

just because a house may be under £500k today, doesn’t mean they’ll be exempt forever. This property tax increases in line with inflation. It’ll only be a matter of time until more and more homes will be subject to this tax due to general inflation of house prices. Don’t think this will only affect the “better off.” The same way they told us IHT is only paid by the super rich, but we all know inflation has meant that ordinary working people are now coming into this threshold and will subject to pay it.

I think they will just readjust council tax bands.

MPs rarely don't do anything that will impact their own property portfolio, and most have them.

Using googlemaps, planning applications, driving around, electoral role, there will be a shift in bands and an increase in the number of people in higher bands.

I know a woman who has just been given a brand new 3 storey house on a new housing estate (housing association) she only works 18 hours a week, despite her children being teenagers and her rent paid for and a wages top up - how is that fair?

Pensioners and pensions are of course a huge cost to the country. There is no getting around that. I am not sure that's blaming anyone, it's just fact. Another issue with the elderly is the cost of their health and social care. Again that's not their fault, but is a huge cost. The question is how to fix it.
Ideally you would improve health outcomes for everyone so that healthy life span expands in the same way life span has done. It hasn't kept up so we have people living longer but needing a lot of support for this extended period. And they can't carry on working either. Which is costly.
Reforming the workforce would work too - it's one thing expecting people to work long but there need to be suitable jobs. Part time, flexible, reducing ageism etc. All evidence suggests that people working for longer is beneficial to them as long as those jobs are manageable and suitable.
I honestly do not get this thing in UK politics that pensioners and ring fenced from any sort of discussion. It's a huge cost on society but any mention of that is seen as a personal insult to old people.

There will be a marked decline in claimants of state pensions over the next 20 years as the boomer generation drops off the perch and Gen X become pensioners.

So what to do during the next 2 decades? Just ignore it? We will still have an aging population after that anyway.

I think you are looking at it the wrong way. I moved from the midlands to a more expensive area for housing. Wages were generally lower in the midlands but people here aren't paid in proportion to the higher house prices so basically in my experience people are actually generally worse off here and have a lower disposable income even though their headline income and house values are higher. Their house may be worth more on paper but that's no good to someone that can't liquidate the house as they need to live somewhere and also would often need to stay in the same area anyway.

The policy would hugely impact our area. I know a couple with similar jobs to you and they have stretched themselves financially to buy a modest family house in this area. For context it's a large terrace with a small garden. They would fall under this policy even though their income is similar to your income. I imagine you can afford more luxuries if you haven't got such high mortgage payments hanging over your head.

There will be a marked decline in claimants of state pensions over the next 20 years as the boomer generation drops off the perch and Gen X become pensioners.

It’s a deflection when really we should perhaps all consider whether we all have a duty and responsibility to pay in our fair share when we are working and can.

It's complete deflection to exclude pensioners when taking about duty and responsibility to pay our fair share. Mind blowing!

In terms of your comment no one’s blaming pensioners you haven’t seen some of the comments often on these threads then. ‘ Oh but ‘ pensions and pensioners is often used to blame them. It seems for just existing There were Some truly dreadful comments on discussions re euthanasia and the cost to the tax payer of pensioners

But many posters want to mention the welfare bill and then ignore that pensioner benefits make up a big chunk of that.

This is a thread about stamp duty, council tax changes. The only reason someone would mention the cost of pensions is to blame the elderly yet again.

No it's a thread about tax rises because the country is in dire economic straits. One of the reasons for that is an ageing population and the fact no gov has planned for it. How can you have a thread about economics and related tax rises without discussing the reasons for it?

Acknowledging that is not blaming pensioners. But it does explain why governments have got away with not planning for it because people want to ignore it for some bizarre reason.

It will decline because there’s a bulge in the demographics currently. That bulge will thin out, ie become less weighted as people pass away

But a big part of the issue is dealing with the bulge now.

Why will it because less weighted though, the demographics aren't going to switch back. And upcoming pensioners will include more renters and more without good private pensions.

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

It will decline because there’s a bulge in the demographics currently.

That bulge will thin out, ie become less weighted as people pass away

In terms of your comment no one’s blaming pensioners you haven’t seen some of the comments often on these threads then. ‘ Oh but ‘ pensions and pensioners is often used to blame them. It seems for just existing
There were Some truly dreadful comments on discussions re euthanasia and the cost to the tax payer of pensioners

So. When a pp commented ‘why are pensions always brought into threads like this’ my comment was fare

This is a thread about stamp duty, council tax changes. The only reason someone would mention the cost of pensions is to blame the elderly yet again.

It’s a deflection when really we should perhaps all consider whether we all have a duty and responsibility to pay in our fair share when we are working and can.

This thread has been really eye opening for me and think goes to show inequality in income etc across the country. DH and I are consider ourselves to be well off - full time teachers on UPS, 2 kids (youngest going into Yr 7 so no longer need wraparound) - and our house isn’t worth anywhere near 500K in the West Mids. I’ve just looked on rightmove for our area and the typical house price is 300k. I wonder if this policy will be be area dependent.

The poor sucker who's saving into pension will save about 20% tax is lucky (maybe 40% on some limited amount over 100k) - their current tax rate is 40-45% and on withdrawal it's going to be 20% if not 40%.

Whatever is left unspent will be taxed at 40% with IHT and then their kids will pay their marginal tax rate in withdrawal, so 60-85%.

Vs benefits when it's pure take from taxpayer.

I also believe that at some stage state pensions will become means tested so those who're saving into pensions now will be royally f..ed.

What I would really like is why can't we get those 20 yr fixed mortgages that other countries have where you can renegotiate if rates come down?

So do I! I’m starting to think why did I scrimp and save for a deposit for a house, when I could have just got a housing association house and work 18 hours a week? It’s an absolute joke - do any other countries allow people to do this??

I would have died before being top of the list for a HA house.

Other countries have property taxes as a % of house value, CGT on main property, etc

You realise that you will not be immune from further tax raids on the rest of us, dont you?

It's mainly people on benefits who defend fraud.

The difference is between trying to keep more of what's yours, what you or your family earned, vs trying to take most of other people's money.

Not just people in London but people in many parts of the South East that need a family home with sufficient space to raise children. This is clearly going to penalise families that can't downsize so easily and have children that would obviously benefit from things like having a garden and their own room (a family with 2 adults and a boy and girl will need 3 bedrooms for example when the kids hit the teen years).

So do I! I’m starting to think why did I scrimp and save for a deposit for a house, when I could have just got a housing association house and work 18 hours a week? It’s an absolute joke - do any other countries allow people to do this??

Oh I agree completely, the economic and even moral implications of tax avoidance Vs benefit maximisation are different but I do think they are two sides of the same coin i.e. People working within the rules to either reduce their tax burden or maximise their entitlement.

I would obviously tackle benefit maximisation first because I think it's economically more damaging, happening at a much wider scale and is morally more reprehensible.