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.

Well if the tax works by gathering up and applying on the sale (which I think is a terrible idea. People would just sit tight) you don’t pay it unless you move.

But the economist in me says you can’t afford where you live and so must move. We shouldn’t NOT put tax on property because some can’t afford to pay. Like the little old lady in a £2m house. We can’t increase council tax apparently cause she can’t afford it. She is wealthy. We should tax her. If it means she has to sell so be it.

You help the economy grow by attracting foreign business and money to our country, and encouraging more businesses to open and stay open by lowering business related taxes. Improving the economy doesn’t necessarily mean attacking the environment. Taxing your way out of debt is mediocre way of solving anything. It’s doing quite the opposite effect.

the health related benefit bill is rising exponentially.

It doesn’t trouble me that I’m receiving a big inheritance. I’m just saying that those like me who do haven’t earned it in any way, whereas someone who has no inheritance has a much harder life. Inheritance will get much much more important in future years. As Paul Johnson, former director of the IFS says, be careful who you choose for parents.

And no homeowners are not already taxed a lot. The only tax they pay over renters is stamp duty. The little old lady in a £2m house pays bugger all on vast capital wealth.

No, of course not, but I'm not a bad bellwether as someone living in a property worth over £500,000 in the south east as someone who may face tax increases. But in fact it seems the same as we pay now.

The problem is that many economist agree that people's spending habits are currently linked to how well off they feel according to the equity built up on their home. If you start taxing that equity they won't spend.

Plus the rest of the country needs to pay its way, the south east property market is not a piggy bank for the rest of the country to dip its hands into. The cost of living here is more, I earn a good salary but spend £300 a month on travel and some pay a lot more. Higher value properties means higher mortgages, people don't necessarily have a higher disposable income.

I am interested in why anyone thinks young people in the South find the South more affordable than a Northerner? They don’t pay you more for being a Southerner!

I guess you mean they can stay at home. Yes, and they do. I have three young adults still living with me. I sleep in the living room in my 12ft wide terrace. The only way they can move out is to pay £800 for a room as they can’t afford the £12-1400 for a flat.

To the topic at hand. I don’t agree with property tax on a single owner occupied home. Tax should be logical. Where is the logic in saying someone who has paid more for something therefore has more money than others! It’s not a choice around here.

People get that they have to contribute but want things to be fair. Why work if others get the same for not bothering (see pension credit). Why do the right thing if others ignore the rules? (see legal migrants vs illegal entrants on boats).

You were checking and you can submit this information to the Valuation office. You would show 5 other houses in the village with same bedroom numbers and similar features - you already have two

then the valuation office is made aware and can reband if appropriate

absolutely nothing stopping you

then the tax is paid at the correct amount

Innovative idea - what about making 23% of people of working age who are already here and presumably housed somewhere work? you know, those 23% of economically inactive ones? those 9.9m people of working age who claim benefits to work more? 5% shift in this number would make economy grow a bit and remove the need for tax increases. At present every £12 out £100 tax we pay goes to benefits.

But nobody paid it. The loopholes were massive, and it was massively exploited.

They don’t pay you more for being a Southerner!
Yes, they do.

I would love her to do this - all those people in high value houses by pure chance. It would also mean less being passed on to inheritors.

Seems the fairest option but I bet there will be loads of get out clauses to avoid hitting landlords or Gov cronies.

I can't understand the 'we'll stick with this, thanks'. The property market is insane and distorting. We're sinking a massive proportion of GDP into propping up house prices in the SE - which benefit nobody, when with modern tech there is not one single reason those jobs couldn't be elsewhere.

We live in one of the towns on the image pp posted of the highest council taxes in the country. Our house is worth a bit more than £500k, but doesn't have enough bedrooms for our kids (multiple birth + autism meaning they can't share long term). We can't extend to build more bedrooms or otherwise increase the value of our home because we would be over-investing against it, like a lot of the houses around here. Very ordinary houses pimped out to the max to try and justify an artificial price hike on next sale.

We can't go up a band because of stamp duty. On paper we could afford to, but add in a £50k tax and we can't make the figures work. Whatever happens, we need to get rid of that tax and reform the ridiculous way property sales work in this country to take some of the uncertainty out of moving.

Something will have to happen now anyway. As soon as we started talking seriously about taking stamp duty off the table, it became a matter of when, not if.

Unless you suggest bringing back slavery, I'm not sure how you intend to bring back peoole who have withdrawn from the workforce early due to ill health or by choice, or those who aren't working while they are carers. In some cases saving millions - in care costs that would fall to the state or performing voluntary work.

And as for in work benefits, employers should be paying more. The government have made them pay more, to an absolute cacophony of moaning for the last twelve months.

It’s only stamp duty by a different name which is already based on the value of a property!

I agree with a PP about ADHD. People with ADHD shouldn’t be getting PIP or have carers.

It’s going to be interesting if council tax is changed and only paid for by the property owner & not the tenants.

that’ll not be easy to cover by increasing the rent either - as there is a cap on rent increases

£800 minimum - but that’d mean no council or social housing tenants would have council tax/property tax to pay

aling with any other LL who’s tenants wouldn’t have to pay - the landlord would be paying

But it is still stamp duty, in typical Labour style by changing its name they’re trying to dress it up as something else!

Typical Tory style: sit on your hands and do fuck all about property taxes for 14 years.

Actually you pay Capital Gains Tax at ? 20% on profits from selling a house - the difference between old price and present price - not on you own home -but other properties - so there already is a tax.

The problem is that many economist agree that people's spending habits are currently linked to how well off they feel according to the equity built up on their home. If you start taxing that equity they won't spend.
And, again, this proposal would be a tax cut for most home owners.

People in poorer areas are already paying their way. Richer areas tend to have lower council tax rates, even in absolute terms. That is, in part, because council tax is based on valuations from 35 years ago, leaving rich areas "undervalued" (as values have increased at greater rates), and in part because affluent areas tend to have alternative sources of income, like business rates, or parking fees (much of the latter coming from outside of the borough). There is, of course, great need for council services in poorer areas but, even if you don't think rich areas should have to pay more than their basic share, they aren't really paying that, as present.

My own property is worth around £180k. I don't live in an expensive part of the UK. It seems like a good plan by Reeves. They have to find the extra cash from somewhere...

The issues with this tax is:

a) it only applies to properties over £500k. It should be applied to all.

b) it is affected by transactions. Any tax on property transactions is a bad thing as it gums up the market.

Scrap stamp duty and council tax and charge a straight 0.5-0.7% on all properties every year and it’s a good tax.

We have a desperately low birth rate. We desperately need young immigrants who are, almost by definition, ambitious. You don't risk life and limb to eg claim asylum here unless you have to and want to better yourself. They are cheap too. We haven't had to pay for their hospital births or their education. If they subsequently marry or bring their wives and children here that's an added bonus.

The problem we have is not immigrants, it's the concentration of wealth increasingly in the hands of the super rich. The richest 50 families in this country own as much as the poorest 50% of the population. We need to tax more fairly. Stop allowing the super rich to off shore their profits etc etc. We need to tax all our citizens fairly. I believe Rishi Sunk paid only 25% tax on his enormous wealth.

Many countries can afford to pay old age pensions at a higher rate than us (we have the lowest in Europe I believe), despite being one of the 5/6th richest countries in the world. Many countries pay OAPs at a younger age than us despite having much lower per capital incomes eg China - most women get their OAP at 55 (only managerial women wait to 60! ) It's the poor who do not get a pension at all if we keep raising the pension age as they die much younger than the rich.

It's political will that we need. Stop privatising our wealth and services, Water, Electricity, Rail, NHS etc etc and allowing the profits to be sent abroad or into the pockets of our super rich leaving us with their ill gotten debt.

Those countries paying pensioners more are able to do so as those pensioners paid in far far more than ours did.

She's putting all kinds of ideas out there as a 'feeler' to see how much kick back there will be.

Sooner the woman is gone the better.

She's clueless.

Will someone kindly tell her that you don't get growth by increasing taxes?