Rachel Reeves considering charging CGT on sale of main residence?

She doesn’t say she’s struggling - she’s just saying it’s… unremarkable.

And it probably is - say £4k of her £6.5k is mortgage, that’s about £750k of borrowing. Thats not buying you a house in an exclusive part of London, and is still going g be ~1/3 of their income after tax, pensions etc.

She’s better off than most - but you’d think someone with a £300k income would be living in a huge house with a nanny, two expensive cars on the drive etc etc.

In London that just isn’t achievable on that income now - which presents a problem, as it’s obviously a large household income. What is the incentive for someone like OP to stay in the UK if the lifestyle she can afford as the ‘1%’ is just… fine.

As for everyone else - sure they’re in a worse position - but the point here is that this is yet another policy targeting ‘those with the broadest shoulders’ who are already questioning if the tax burden is fair, and have more options than most to go elsewhere.

Well if you don't socialise or go out, it'll be fine. You won't miss London will you?

When you retire your parents will no longer be around and you'll be able to relocate to another lovely bit of the UK and still have plenty of money left for your retirement.

Problem solved.

Well it's a moot point... no political party seems particularly interested in our vote or in retaining the >£140k per year tax we are paying but i imagine they'll miss us once we're gone

Either way cgt on your primary property is a dumb ass idea...

This is so depressing. We live in an area where houses are very expensive.

We’re only still here as elderly parents need our unpaid care.
Our mortgage is extortionate and essentially our house is our pension as we don’t have funds to save or add to pension pots.
We don’t go on holiday, go out socialising at the weekend or spend any money on clothes or hobbies. And we have 3 ND children, varying ages & 1 ND grandchild.
We’re not living, just existing.

It will lead to lots of larger homes being split into flats which will have higher combined values without the tax.

But it is meaningless if every other property has also gone up. Unless you move to a much cheaper area. Many older people will want to downsize in the same area to be near friends/GP/family/amenities. By the time all the costs are paid, they might as well stay put.

If it happens, it will initially be set at £1.5m. After the next election, the incoming Chancellor will lower it to £1m. And, just like that, the principle of your own home being free of capital gains tax will be gone.

Oh, and with council tax set to be levied on property value, the Government will have the option of taxing you on what it deems your house was worth, not what you sold it for.

Struggling on £300k per year combined. 'Only' got a five year old polo. If you are paying £6500 on mortgage and childcare, you haven't really done great financial planning there have you?

You then pay another £4k a money on everything else?

And you're NOT living like Kings?

Have you stopped to think what everyone else is spending?

Sometimes I wonder what planet others live on.

If it’s ctg it is the gain, like it is on properties which aren’t primary residences. It’d be removing the exemption on the latter for more expensive properties.
it seems like a bad idea to me because it’s not something people will have factored in. Also unclear if the ‘gain’ would be a true gain versus inflation? Something seems very wrong if a person wants to move to an equivalent house elsewhere (eg for work) or even downsize and between this tax and stamp duty they might end up out of pocket.

The labour government need to stop with these stupid ideas, and in particular reverse the anti-growth increase in NI especially that imposed for lower paid workers. They need to confess they made a promise they can’t keep.

The “gain” is part of the equity. I’ve been in my house since 2001. Some of the equity is my mortgage payments, some is the rising market (which whatever house I’m buying after this has also been subject to), some is due to improvements I’ve made which have incurred varying expenses. I’m aiming to sell in 3-5 years and some of the things I am doing now are specifically to add value to maximise my profit. If I’m being taxed on work I’ve done and paid for then I should have been told before now. I also should have been able to assess whether things I’ve done myself on the cheap I may as well have saved myself the bother and paid someone eg my driveway which I was quoted £8K for and managed to do as diy for about £1500 (I’ve no receipts so is it deductible or not? My brothers and sons who helped out were “paid” in takeaways and beers). It’s simply not reasonable to tax people on a “gain” they’ve made when they bought a 4 bed 2 reception room, 3 bath house with parking for 2 cars in 2001 when they are selling a 5 bed, 3 reception room, 4 bath house with parking for 3 cars in 2028 as if they haven’t influenced the “gain” or incurred any expenses at all. An annual land tax for living in a whopping house I could deal with just like I had to put up with driving a stupidly large car for years because I decided to have lots of kids but disincentivising downsizing and home improvements stagnates the market.

Beside which, a person approaching 67 now who has paid off their mortgage on an “average” house worth £290k, will have paid around £19k for their “average” house in 1980 when they were 22. They will be taxed on the gain of £271k and not taxed on the £19k they have paid (is mortgage interest deductible? Is overpaying worth it anymore?). Tax on £270k that you thought was tax free isn’t insignificant just because it’s “only” on the gain. The proposals seem to just be covering more expensive homes atm but the principle is the same. If you are older and depending on the money released from downsizing to retire in then you are fucked.

"Only 880k"

I love in an expensive desirable part of the country. That's still more than my house is worth.

It's an argument that's difficult to make with a straight face.

House prices can go down as well as up but people still seem to forget this.

I don't agree with the policy as such but making the argument that you "only have £880k" is a little crass to say the least.

£880k will still buy you a reasonable property even in London.

Really?

Example
You are mids 40s...
You bought a in london for 1m in 2019
It's now worth £1.2m

You now have 2 kids and need to move to an equivalent home because jobs/ insane neighbours/ you need to care for parents/ whatever.

Your new home is also £1.2m

so not you need to find:
£63,750 stamp duty
£10,000 solicitors selling and buying fees and moving costs...
AND 48K cgt...

So 120K extra on your mortgage instead of the already outrageous £70k) for having the temerity to move... sounds great!!!!

The other reason its bullshit is we are just 15-20 years behind Japan so this isnt a cash cow long term.
Yet again the boomers who are cashing out now are getting the best of it... and those who stand to inherit generational wealth from boomers as they pass on.

Anyone who doesnt have wealthy relatives and just wants to live their lives and is under 50 just gets screwed...again.

It is but it doesn't mean you have the cash to pay the tax. Generally you want to use all the money to buy a new property.

And it's about motivation. You want your tax scheme to motivate people to work more, to spend their earnings in the local economy, move up and invest and generally boost the country's finances. Punitive taxes like this achieve the opposite.

So you could make a massive gain on a property now worth £1.4m that doesn’t get taxed, and make a small gain on a property worth £1.5m and it gets taxed?

Only an idiot would base it on property value rather than size of gain.

This is a really good idea. The increase in the value of a house is the purest form of unearned income.

This. If the higher rate of tax had kept in line with inflation, the threshold would be about £80k. Pesky fiscal drag. But hey ho, keep hammering the working middle.

Exactly the same for us.
Yesterday morning for the first time since moving to the UK 15y ago, DH said we should seriously discuss a potential move abroad.

What I don’t get: couldn’t they increase tax on alcohol, cigarettes, vapes, gambling, fizzy drinks, etc? Basically thing that are not necessities and that people would still use even if the cost increases by a few pounds. So small amount of tax x lots of people, instead of their current approach of high tax for a small pool of people.

When are they going to get the £60 million back from Michelle Mone?

They are just scatter gunning.

Yes.

Initially it was idle chat but we are also now seriously looking at emigrating in the next 3 years. Our income isnt setting the world alight (a bit of over £300k gross combined) but we are just over it. We did "everything right" and the social contract has not just been broken...it's been set alight and shat on.

We should live like kings... in reality we shop at aldi and have a 5 yr old polo, the kids clothes and most of ours are vinted and mortgage and child care cost us over 6.5k net (then there are bills and food and everything else on top) its almost 10k pm net to stand still

i am paying an effective 80 something % tax on a portion of my salary once lost childcare help is factored in.

we both believe in social provison but we are sick of feeling screwed at every turn... i really feel the drawbridges are being pulled up left right and centre (buy to lets, pensions, fuel allowance, huge house prices rises of the past.. the list goes on)

Yep!!

3 small businesses near me have closed in the last few weeks. We are left with the charity shops and the money launderers. Burglaries have increased rapidly in the same time period as have car thefts in broad daylight.

cost of stamp duty reduces incentives to buy, this will reduce incentives to sell, and so we’ll have 4 years of people staying put and voting labour out next time…

we need long term reforms - council tax etc. not this kind of thing.

Raise the basic rate band to £20k, the higher rate band to £65k and put a penny on income tax. It would raise a lot but at the same time not penalise lower earners.