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.

lol, what is their manifesto on this and how are the elected ones of this company doing so far?

@nearlylovemyusernameit's hard to compare the other taxes like for like.

Property tax and council tax are essentially the same thing and stay with your city so those align

Income tax federally is less than here but there's also state tax which varies even within a state as the cities also can tax additionally. Milwaukee has a city tax and a stadium tax everyone pays whether you like a sport or attend it! Some states have oil reserves and don't have any state tax. My state is 5-6% on top of federal which is average

Federal is
10% $0 $11,600
12% $11,601 $47,150
22% $47,151 $100,525
24% $100,526 $191,950
32% $191,951 $243,725
35% $243,726 $609,350
37% $609,351 And up

Other tax is less on inheritance and dividends. We pay a lot of tax on utilities- eg added to phone , gas and electric but less sales tax than the 20% vat here. It can be 10%.

There is way, way more out of pocket for health care (copays, uncapped prescriptions) even with insurance, and student loans can't be discharged even in bankruptcy and even if they were predatory

Americans have tax hiding everywhere and pay a lot to get a little. My point with the property tax is that is a massive outlay and can hurt low earners, unemployed, people whose circumstances have changed, poorer people in cities and elderly who aren't elderly enough, and the cities have a lot of repossession power and power to determine what people pay.

To be fair to some Labour voters, they aren’t stupid they just hoped for more (a common Labour supporter emotion, hope. Pointless of course).

We knew Labour wouldn’t do a good job, of course we knew that. We couldn’t have predicted just how catastrophic they’d be, I don’t think. Because it is truly shocking.

It is worrying, if the conservatives and Labour were any good this wouldn’t be happening.And yes, the older generation, have been taken in as well.

It's only being discussed at the moment, there will be a lot of opposition so let's wait and see. I sold my house to my son at the beginning of the year, am glad I did for his sake, wouldn't affect me if i'd departed :). My current, 'new' abode, a 2 bed flat was well under £500k.

House prices will have to decrease with extra taxes on top. People will find themselves in negative equity, once they factor in selling the property for inheritance tax. So the government get it twice?

What is the point of saving, being aspirational, encouraging dc to save for a pension, buying a house when it's all ear marked for Rachel's piggy bank?

And nothing is getting better either. NHS, police, dentists, council tax , business nics, food prices. They even have it in for the bats and newts- riding roughshod over planning laws to build more houses that no one can afford and aren't being built to house people who's families have paid taxes for decades.

We are giving away our savings, and future savings. Pensions aren't being released. So where is the money being spent for the benefit of the public, who contribute over years.

I bought my house in the late 1990’s in Surrey for £130,000.
We earned the wages of an engineer and a clerk at the time - joint income of £30,000 plus equity from selling our previous home.
On our last income when both were employed, in 2020, no way could we afford to buy the 2-and-a-box bedroomed semi at the price it had surged to (£800,000+)
As a one income, one small pension household, how the hell are we supposed to suddenly pay a tax on the current “value” of our home?
We didn’t drive the prices up, and our home is just a roof over our head, so why should we be penalised for daring to live here?

My house is worth just over £500k all that will happen is the value of my house will go back down to 495,000! It's weird to have a threshold just like most government ideas. Why are things not taxed on a scale? I have no issue paying tax btw it just baffles me the schemes thy come up with. I guess it would massively affect the housing market with a drop in prices around the 500k mark and less people moving out of pricier houses. In many areas of the uk it won't have a huge impact but as op has mentioned it will in the SE. (Where I obviously am in my semi detached worth 530k which is insane!!!)

If RR implemented this tax surely it would justeam those with houses valued over £500k simply wouldn't downsize as they go older but would just stay in a larger house than they need.

Instead of trying to drag in more revenue RR should focus on reducing benefits.

I’m sure people were saying exactly the same thing in 1946.

Most people ageing today have paid enough.

No @Closetoknowing they haven't. What have you read that says otherwise?

No, income tax is already at a record high. It’s not fair on younger generations who don’t own assets and are trying to save for a home. I think it’s about time that we started taxing wealth instead of income.

Well, actually, I think we should be drastically cutting the welfare bill, but given that most of MN seem to strongly oppose this idea, perhaps they should shut up and pay up. The money has to come from somewhere, but nobody ever thinks that it should come from them.

Not this one! Worryingly a lot of young men have been taken in by them

Not as worrying as the numbers amongst older people.

"The party is more attractive to men, with 29% considering voting for Reform, relative to 19% of women. Interest in Reform UK also increases with age, with 36% of over 65s and 28% of 50-64 year olds open to casting their vote for the party in future, compared to 17% of 25-49 year olds and 14% of 18-24 year olds."

Most older people don’t downsize anyway, they insist that they want to stay in their homes. I imagine that this would mainly affect probate sales.

Presumably you could downsize if there are only two of you. I guess that this is part of the plan - to discourage older people from taking up family homes.

How much could you feasibly downsize from an essentially two bed house?

You want to crash London housing market?

You seriously think every member of the Labour party owns a house worth half a million pounds?

Presumably to a one bed retirement flat? People with 2 or 3 kids raise families in houses with 2 bedrooms plus a third box room. Box room will often be a nursery, or bedroom for the youngest child.

I’m not suggesting that the poster should do this btw, I’m just saying that this is the government’s perspective. Why have an older couple living in a home that could house a family.

But all my money, that I have already been taxed on, has gone to pay off my mortgage. I haven’t seen any capital gains in my property. I bought when prices were already high. For me, it’s not “wealth” - it’s everything I have. In fact my pension pot is tiny because I had to prioritise a roof over my head, and I was hoping that in the future I could sell and use some of that money towards my retirement (given I have no other money). Being taxed on that just feels really unfair.

How can you possibly know that most of the aging population have paid enough.That’s not correct, many of the aging population claimed benefits, got a state pension without actually contributing or not contributing enough, that’s why they get pension credit and many get housing benefit.
Today it takes 2 incomes to buy a home, pay bills ect, whereas years ago, it was common place for the woman to stay at home to bring up the children and man go out to work.So all the women who stayed at home for years, how would they have made enough contributions to get a full state pension, they didn’t but they still get a state pension.
I’m sorry but it’s really frustrating to keep hearing the older generation didn’t claim benefits! Like as if the welfare state only evolved, 10, 20 years ago!

This is complete nonsense. My brother is a teacher in the Midlands. Someone doing the same job in the area of the SE that I live in would get paid the same salary as him but the exact same (Barratt) house as his would cost three times as much. People in certain areas of the country are already being punished by extortionate housing costs…do you want there to be no essential services in these areas?

And how do you propose doing this?

It is wealth because you have a very expensive asset. You could be renting and have exactly the same outgoings, but have nothing to show for it.

As well as having no asset, renters typically pay many times more than homeowners over a lifetime, because rents usually go up every year with inflation, while a mortgage will typically become a smaller and smaller proportion of your income.

I’m a homeowner too, so I’m not arguing that it’s ‘fair’ that you should pay, but I think that taxing wealth and assets is fairer than taxing income, when income tax is already at record highs. Income tax disproportionately affects the young who own fewer assets, and who cannot work to acquire them when we keep on taxing their income at higher and higher rates. Older generations who benefited from lower taxes and lower house prices, and therefore were able to accumulate assets that the young cannot, need to pay their share.