to think it cant carry on young families living in cramped flats while protected pensioners rattle around in 5 bed houses

[generationrentsucks]

I just think with the Tories in now, nothing will change with housing, they will keep prices high by carrying on with these help to buy that just allow sub prime loans.

Also I think hardly anyone actually ever downsizes, everyone says they do but not many can actually bring themselves to do it.

"SomethingOnce Mon 11-May-15 21:08:06

Where does reasonable taxation end and confiscation of wealth begin, Lotus?"

Indeed. If tax is too high people can never accumulate any savings (I have none) although that's because of paying out to a man on divorce. People have different views - at one extreme you should work for the state with every penny going to it just as those North Koreans working in Africa and Dubai work in effect for nothing and the state provides everything. Then at another extreme you might have no or very low tax. The UK has become more high tax of late and much bigger state which I think is a mistake although this wet middle ground fairly left wing Tory party is not likely to do much to change things.

Just google incentives for council tenants to downsize, and some councils have been quite inventive. I bet paying for removal costs and help with decorating would be a good idea.

I think there would have to be quite a lot of ground-floor flats for older tenants, though.

I live with DH and two DC in a two bedroom local authority flat. It's been a year now and it's awful. I can't imagine how people cope in smaller places (and I know they do)

We're constantly on top of one another and as we're 2nd floor, we're always, always on high alert for the DC making too much noise which might disturb the lady below us.

It's hell frankly and when I look around the street and see ALL the houses which were bought through Right to Buy with semi retired couples in them I am so upset.

I know it's not their fault at all...they took advantage of the scheme so they could own....but it makes me mad.

We're emigrating. We don't see much future here for us at all.

I work in Housing for a large local authority. We are having a massive drive at the moment to get people to downsize. I know of 3 people in the last week who have moved from 3 bed houses to 1 bed sheltered housing flats. There is no pressure, they are invited to an open day to have a look around, and shown around the scheme properly. It works really well.

It seems wrong to kick people out of their council houses just because they're not homeowners.

that's why you charge full rent or bedroom tax them. I agree, it's draconian to kick people out... carrot and stick it.

I think a reform of inheritence tax is a pretty good way to encourage people to downsize, something like increasing the rate paid on death and decreasing if passed on 10 years or more before death.. basically attempting to get older folks to downsize and give the younger generation a boost.
I think on a personal level I'd like to see the end of the idea that the inheritance is passed on to the next generation down - I think it should skip one and go to the grandchildren. It seems to be a sad fact that you need money when you're young but dont have any and don't need it when you're old and have lots! It seems quite prudent to give wealth to those just starting out in life / with young families rather than amassing it all in the elderly.
Having to pay for care home fees should help a bit, as people will sell to avoid it all going on fees at a later date.

I definitely think that pensioners should be paying the bedroom tax, I dont fundamentally disagree with it as long as there are certain exclusions. Disabled people who need the room for a carer, separated parents who need the room for a visiting dc etc. And I also think it should only be applied if they have been offered a more appropriately sized house and declined. It doesnt seem fair if they are being charged but are unable to move!!

I agree that the purpose of taxes is wealth redistribution. I think in a sense thats what Tax credits are for, if you look at them as a tax break for families and low earners rather than a benefit. It makes the tax system more progressive and accepts the increased costs that families have to bear. I think more could be done in the system to better redistribute wealth.

Our council gives a one-off cash payment of 3k to anyone who downsizes from a 3-bed to a 1-bed- so yes, there's plenty of carrot in with the stick keepitsimple.

Inheritance tax should be scrapped altogether as it's double taxation. I bet that really would convince more people to move if they knew they could pass on cash to their family without risk of the large tax on what they gave if they passed away within the time frame where inheritance tax kicks in.

Yoruba You could certainly amend the law of intestate succession in favour of grandchildren over children but what people do who make a will is up to them.

I think a reform of inheritence tax is a pretty good way to encourage people to downsize, something like increasing the rate paid on death and decreasing if passed on 10 years or more before death

That's already the case, if assets are passed more than 7 years before death no inheritance tax is payable.

Inheritance tax should be scrapped altogether as it's double taxation.

No it's not, much of it is from the growth in the value of assets on which no tax has been paid. Even if you could argue this it's still not double taxation because the recipient wouldn't have paid any tax on it. I think inheritance should just be treated as income of the recipient, so if they're a higher rate tax payer they pay higher rate tax on it and if the pay no tax then they don't pay tax on it. This might encourage people to distribute money widely and also leave some to people who have very little.

Also if you think that about IT do you think all VAT should be scrapped as well?

You could certainly amend the law of intestate succession in favour of grandchildren over children but what people do who make a will is up to them.

You could but then that could mean that one grandchild gets everything while others born after the parent had died get nothing. At least if the law favours children you can be pretty confident (although not completely) that no more children are going to turn up years later.

I agree fakename The law of intestacy is never fair to everyone. Which is why if you have a pot to piss in you should make a bloody will!

Yoruba, the state plans the opposite - less inheritance tax if you leave a home than if you leave cash. it's a ludicrous change and typical of the state's constant attempt to make laws more and more complex. It would be better to be abolishing IHT entirely.

If you want people to downsize, how about this?

A downsizing bond which only older people could buy when downsizing. It would not be encashable till death, and then it would not carry interest, but would be revalued in accordance with the movement in the house price index when it was bought. It would be exempt from CGT but would form part of the estate for IHT purposes. And it would be ignored when considering liability for residential care-home fees so that if you downsized and released capital you could protect it for your estate when you were gone.

That might work but most people don't use their capital gains tax allowances anyway so CGT is not an issue for many people.

The house builders have land banks. They will build first time buyer and other homes in areas where people will buy. The problem is the 2014 tighter mortgage criteria which I am against, imposed on the banks which really mean you need now to buy before you breed and secondly absence of 95% mortgages from most of the market and it's a problem in cities. In much of the country there are properties to buy and they don't cost too much. I was looking at a gorgeous isolated cottage in Northumberland where I am from - even sent details to my postman son who obviously through his silly career choice is not going to find it easy to buy near where we live within the M25. Not expensive in some parts of the country.

I agree with the person above who mentions the 7 year rule. When I read about 7 I would imagine unless law changes I will give everything to the children so no IHT will be payable when I die. You can argue that IHT is a voluntary tax no the stupid as it is easy not to have to pay it.

Except it's hard to predict when you will die. It could be 7 years, 15 years or 1 year. My parents started giving parts of their estate away from their 50s and have given about £1m away so far and well beyond the 7 year rule. But they've managed this only because they have enough assets left to pay for their own care, and several other houses. Giving your only house away is surely risky for the elderly.

I know it's hard and I may be one of the few people on the thread who HAS paid inheritance tax in the last few year - my parents died soon after each other. I hope the recipients of my parents' hard work spend the money wisely - the Government. However in most cases people will die over the age of 70 and more likely nearer 80 than 70.

If you trust your children you can give them money earlier. All of us would have had my parents to live with us in old age if they had run out of funds and I am sure at least one of my 5 children would do so. I DO trust them actually. The one thing to avoid though is that they divorce and their other half gets the money. So certainly I have a loan agreement with one and with the other set of parents have a loan agreement too with their son, which I totally understand. That works now whilst we are all fairly young parents of adult children. It will get less sensible - loan agreements - when we are closer to being on the way out. the fact there were4 grandparents at my daughter's wedding who were 90,90, 89 and 88 probably shows on both sides we are fairly long livers....

If you give your house away and still live in it you need to pay a full market rent which many of course can afford to the children otherwise the gift doesn't work for IHT. The big problem is the state changes the rules all the time so you constantly have to keep on top of the current rules and adapt accordingly. Of course plenty of people take an opposite and more socialist view that the less money children are ever given in life or on your death the better and that it is better if most of our money goes to and is kept by the state. That is up to each person to decide (not my view).

If you mean a 5 bed house which has been paid for, therefore owned by the occupants then YABU....extremely so. What any person does with their own money is entirely up to them. There are plenty of millionaires with 20 roomed mansions who are also entitled to do what they want with their own cash. Also, many homeowners ultimately leave the proceeds of their properties to their relations, who don't usually turn the inheritance down.
The only solution to the housing crisis is to build more homes. The council housing stock was sold off in the 1980s and never replaced. You can thank Mrs Thatcher for that.

DemelzaandRoss The electorate ratified her decision in 1983 big-time. And in England no party which even thought about ending RTB need bother to fight an election.

More houses; new-build covenanted against BTL: break the NIMBY and NODAM and BANANA gangs.

Andrew - but in 1983, it was far too soon to see the results of RTB.

We certainly didn't have the London property boom then. 10 years later people were living in negative equity.

Not sure you're right about the abolition of RTB being a vote loser. So few people living in social housing now - and those that do, often don't have the means to get a mortgage.

Thyemout It's a fact that since the kicking the electorate gave Labour in 1983 (with some encouragement from Mr Galtieri) neither they nor the LibDems have proposed abolishing RTB in England - and they have private polls to guide them.

'i need to downsize from my HA 5 bed (yes,they do exist)....but my HA are no help....I'm told to find a swap!'

We are in a 4-bed HA property and only need a 3-bed, technically. We pay full rent so don't get bedroom taxed. But yes, also told to find a swap. Haahaaa. It's a rural area and this is a maisonette that starts on the first floor so you don't have your own front door or garden. In a rural area, too. Every swap begins, 'Must be ground floor or house'.

So here we stay. Private renting we would need partial HB for. And the whole reason we are in here is due to not being able to find a LL who would take any HB and children.

Andrew - I'm glad you mentioned the Falklands effect - that did play a part in her reelection. The polls, as I remember, weren't particularly enthusiastic about her up till then.

Yes - one of my grievances about Blair. He could have abolished it in his first term and still have gone on to win another one, imv. But, again, it's only relatively recently that the full effects have become clear.

Ex-pat - yes, ludicrous. And it is a tax, tho they don't like the word being used, if you've no choice but to pay it.

Two single mums, one with a grown-up daughter unable to live independently through LD's, have just been evicted from the terrace I live in. (Outer London). 'Accidental' landlords want to sell while prices booming. The last one went for £300,000.

They can't find anything in the private sector because of the HB cap and 'no benefits, no kids'. The council has no vacant properties. (RTB properties not replaced with new build.) One of them is now living in 2 rooms above a chicken n chips on an arterial road, owned by private landlord who is being paid by the council to house them.