Housing isn't a source of unearned wealth

Eh? As in the house was sold in 1971 for say £30,000 and she bought it for 1% of that 45 years later for £300?

A palatable one?

Its a tax. We need more tax to fund better services etc. The country is currently bringing in less tax than it pays out in benefits etc.

There is another answer to this quandary.

We also haven’t seen higher interest rates with such disparity between house prices vs salaries. The landscape is entirely different now & still has to play out but the days of huge equity gains in a few years are over for the majority

A dd bought an ex council house about 11 years ago. She paid almost exactly 1% of what the former owners had paid in 1971 (incidentally well before Thatcher and Right to Buy).

It does suck to be younger

More expensive housing
Wage stagnation
Less generous pensions.

I agree OP.
We are behest to a huge mortgage, which of course costs more than the house did, and yet so many people get all smug about how much their house has 'risen' in value.

Bought 14 years ago.
House has doubled in value

We bought our home in 2000, which was when property prices had skyrocketed and nearly 26 years later (if the neighbours sales are anything to go by) it's not appreciated that much. Disappointing, but ok, only if we want to move.

No one pays CGT on their main residence so a non issue.
The money has not be earned by beneficiaries of estates. Nor have they paid tax on the income used to buy the house. Therefore an inheritance is unearned income.
IHT redistributes to some extent the good fortune of having comparatively wealthy parents/ family. Which is pure luck.

Houses that may have cost less than £30,000 in London in the 1980s would have been around £100,000 if they had kept pace with inflation but are changing hands at £600,000-£750,000 - so greatly exceeded inflation

My parents house was 40k in the 80s, worth 1.6m ish today.

Nominal prices have risen by nearly 50%, so not far off!

None of this is true. I am just tired of people pretending that homeowners are sat on a load of unearned wealth that is ripe to be taxed. It simply isn't true for people that have bought in the last 20 years.

But it is true for some & for many who got on the ladder prior to the last 20 years!

It will be for those who bought directly after the crash in 2010 and sold in 2021 anywhere in southern England.

You cannot generalise.

You quote a higher figure for today

True, but the point is that housing is in a boom and bust cycle.
While a bust may be going on now, it was just after a boom.
2006 was the end of a boom. To measure value now compared to the height of a housing bubble in 2006 right before the market reset to say oh there’s been no gain in real terms is a bit disingenuous.

Which is austerity …and look at what that has done to our economy.

So you are arguing that the better able to pay shouldn’t pay more? So no universal healthcare or education, care for the elderly, special needs children, veterans, state housing?

People unable to afford insulin, chemotherapy? Tent cities. Survival crime. Huge prisons or lawlessness? Gated communities with security staff? Where does it end if greed wins?

Agree houses are not meant to be an investment. If it were an investment, like a stock, they should have sold at the peak.

Guess what? If you add those figures together, you get "up to £1m."

@Itchthescratch Houses are now worth the same as they were worth 20 years ago in real terms.

Correct.

We need to get over the idea that every homeowner is sat on a money making asset and therefore is in a preferential position to pay loads of tax on all this non existent unearned wealth. Too many people don't understand how inflation works. £1 in 2006 is worth £1.65 today. House prices need to go up 65% just to be worth the same in real terms.

Are you bitter because you've just discovered that your home wasn't the passive money-making asset that you thought it was?

The real issue here might be your attitude towards housing and property. For decades, home-owners have tried to appropriate housing and land as "assets," rather than places to live. This forced appropriation is what made the price of housing skyrocket over the past few decades.

Really, what we should have been doing as a society was building plentiful housing, to make sure everyone can have their own home, rather than deliberately restricting the housing supply in a bizarre attempt to try to generate more wealth for home owners.

By the way... no one actually profits from rising house prices. Everyone needs a place to live, so if you tried to sell your house to release cash, you would end up buying another house anyway. The only winner from rising house prices is the greedy bankers, smiling with glee while rubbing their hands together.

If you wanted more wealth, then perhaps you should have invested your money elsewhere... you know, actual investments, instead of property.

I don't know why they ever got rid of indexation for CGT. It's basically a wealth tax now rather than a tax on capital gains. (I know some people would support a wealth tax but we ought to be honest at least about what we are taxing.)