Reeves' plan to tax houses over 500k

[FridayFeelingmidweek]

Just been reading news about Reeves's plan to tax https://www.theguardian.com/money/2025/aug/18/rachel-reeves-stamp-duty-property-tax-council-tax

AIBU to already be worrying about living in the south east? Surely this will force people either to never move, or move away from SE/London.

I'm glad that there is finally something that isn't negatively affecting areas outside the SE but does she actually understand that 500k isn't much down here - 3 bed terrace at best.

It won’t affect me, but has she considered spending less fucking money or growing the economy?

has she considered spending less fucking money or growing the economy

No, no, she hasn’t considered those at all - never heard her mention either once.

I hate Labour

It’s a pretty good idea. Wealth is under taxed, council tax is now regressive and the government need ££. I just hope it happens and isn’t watered down to be ineffective. I live in London btw

Let’s totally unaddress the soaring benefits bill but expect those who are already skint because of soaring housing costs to pay more to fund it. Seems fair?

How thick is she??? having to pay upwards of £500k to house yourself means you have no money left to pay more tax.

As someone who would be impacted by this I don't think it's terrible.
They have property taxes in lots of other countries and our council tax is based on completely outdated values.

Are you being sarcastic? It’s hard to tell, because there are easy things she could do to grow the economy that’s she’s not doing.

What's the easy things to do to grow the economy @Letgoofmyblank?

Growth has eluded since 08...& one reason for our low productivity is our stupidly inflated housing costs.

i was thinking it would need to be something that takes into account regional differences in house prices … then I realised we already have something like that - council tax. Couldn’t they increase council tax in higher bands and then take take a proportion back from the council?

Edit - I misunderstood and thought it was an ongoing rather than one-off tax.

We already have this in Scotland. It just means no one downsizes ever because it’s not worth it.

So paid by the vendor rather than the buyer?

Making it easier to buy the property
But more unattractive to sell a property.
Not actually dealing with the price of property though or multiples of lending or dealing with the rental sector.

What is stamp duty on a home of 550k then?

any government now has no choice but to tap into some of that housing wealth, there isn't any where else to raise tax from.

Ffs. We are already taxed when we buy a house over 500k with stamp duty. It’s ridiculous. The wealthy with leave in droves, then the housing market will collapse and the government won’t get any money! I think fair enough for something like a 10million pound property, but they have to tax the ultra wealthy not middle England!

What I find offensive is that it’s yet another tax that is only applied to the better off. There is a massive difference between the way the UK taxes its citizens and the rest of Europe taxes its citizens. In Europe the basic rate of tax is far higher. The basic rate of tax is paid by so many more people than the higher rates, which is why they take far more in tax than we do and why their services are so much better than ours. We want better public services? We ALL
have to pay more.

What is stamp duty on a home of 550k then?

I think 17k ish if you are not a FTB

She did try to reduce the benefits bill in the PIP reforms, and by removing WFA, but was scuppered by her own party and the massive public outrage. She can’t really win. The financial problems are huge and the decisions she has to take to save money are very unpopular.

I am currently buying a 3 bed house with a stamp duty of £37500 !
no doubt it be spent by the government wisely!

Exactly this.

For those saying wealth tax, it's not wealth though, it's the price of living in SE and will help my family move towards relative poverty. I already plan every meal for £, struggle to pay bills and mortgage but this nutty idea would mean I couldn't even afford to throw in the towel and downsize to a cheaper house in another area as I'd be taxed.

@Letgoofmyblank you are absolutely right that we do all need to pay more and in the UK high earners on PAYE pay rates in line with other countries & it's our lower & middle earners who pay less. The issue is we can't tax those more because of our distorted housing market!!

Council Tax is a joke - in my village two new builds opposite each other 4 bed sold £850k put in band F and other 5 bed worth sold £750k put in band G, bungalow turned into a house recently sold for 1.25 million still in Band E. All should be band G.
Plenty of people appealing being in too high a band but nobody checking of people are in too low a band the £££ council missing out on.

It’s very unclear what this tax would actually be — it seems to be talking about two new taxes.

Part of the reason that house prices are inflated is that people are encouraged to sit put in large properties. If you are an elderly couple in a 5 bed, moving means paying stamp duty. Additionally, if more of your net worth is held up in your property it’s exempt from inheritance tax. Both of these factors need to be addressed.

I think we can all agree that stamp duty is an awful tax, but a tax on selling instead of buying doesn’t really help. An actual % on the value of a home makes way more sense, especially if they are replacing council tax too as the article seems to be suggesting. As houses get seriously expensive they should be paying more (this is how it works in most countries). 20m should pay more than 1.5m, this isn’t the case currently.

IMHO:

— Scrap stamp duty
— Scrap council tax
— Introduce fixed 0.5% annual tax on property prices
— Change IHT so it’s the same rate for all assets, not special rates for houses.

I am currently buying a 3 bed house with a stamp duty of £37500 !

So nearly 1m & how much of the purchase is funded by equity?

No doubt this will all change with the 1.5million homes being built in the next 4 1/2 years

Labour have a track record of transferring wealth from London - they did something not dissimilar to this is the naughties, giving companies grants and incentives to move to northern cities.
I lost my (student) job to my org moving to Manchester. It worked, tbf, Manchester etc exploded with new investment

Get rid of the income tax high marginal tax bands. So many people down tools when they near £100k of income - self employed especially - as there’s no point in earning more if you’re only keeping less than 40% of it.

Reduce the VAT registration threshold to £10k. Again, so many people stop earning when they near the threshold (not to mention took all the people who claim to have earnings under the threshold and charge cash for anything above it).

These are two very basic, simple ideas put to the treasury by their advisors which get rejected as the government fear that they will not get voted in next time as people might not like it. And so we’re stuck in a low growth situation as the government is too scared of the electorate to do anything about it.

It’s madness.

@Rhayader agree, just simplify it