Page 2 | Reeves' plan to tax houses over 500k

FridayFeelingmidweek · 2025-08-18T19:25:24+00:00

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 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.

Letgoofmyblank · 18/08/2025 20:49

hangerup · 18/08/2025 20:47

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?

Stamp duty in Scotland on a £550k house is well over £28k

MrsDoubtfire123 · 18/08/2025 20:49

FancyLimePoet · 18/08/2025 20:42

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!

This !!!

SimoneHere · 18/08/2025 20:50

hangerup · 18/08/2025 20:43

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

I think 17k ish if you are not a FTB

£28,350 in Scotland.

And if you go a bit higher to £750k (not unreasonable in Edinburgh), stamp duty is:

£27,500 in England
£48,350 in Scotland

So it is this extra that they are after. Scotland has proven that people will pay it.

We also have top rate income tax of 48%

I don’t begrudge the income tax, but I think the property tax is poorly thought out because of the impact on the housing market. It further inflates prices.

Evastma · 18/08/2025 20:50

Tax and spend, tax and spend. Useless clowns. Vote Reform.

StrokeRecovery25 · 18/08/2025 20:50

SimoneHere · 18/08/2025 20:39

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.

Edited

Oh dear god, the LAST thing we need is any disincentive to down side.

AMiddleClassWomanOfACertainAge · 18/08/2025 20:50

hangerup · 18/08/2025 20:39

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.

Genuinely curious, how is economic productivity impacted by housing costs? The worker going to work to make widgets for example, why would she be less productive because her rent is higher than last year?

Original poster

FridayFeelingmidweek · 18/08/2025 20:51

Labour seem to be 'testing' ideas in the media at the moment. The benefits bill obviously caused outraged, how will her entire party (all of whom will own houses over 500k) react to this lunacy?

OP posts:

hattie43 · 18/08/2025 20:52

All Labour are doing is taking from people and not growing the economy at all . Let’s make us all broke , why not .

Figcherry · 18/08/2025 20:52

Letgoofmyblank · 18/08/2025 20:48

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.

Show quote history

I’ll be amazed if they get voted in next time.
And I’m a Labour supporter, or was.

SapphOhNo · 18/08/2025 20:52

Evastma · 18/08/2025 20:50

Tax and spend, tax and spend. Useless clowns. Vote Reform.

They don't have an answer either. Just pointless rhetoric.

EricInk · 18/08/2025 20:53

I voted YANBU but I read the article and it’s tax payable on selling homes, so on balance I think that’s fair as most homes changing hands at that value would be involving wealthier individuals or people who paid a lot less for the property and stood to gain £££.

I also think the welfare system needs reforming and it’s a shame the proposed changes were watered down almost to the point of making no difference

OldTiredMum1976 · 18/08/2025 20:53

Well i just watch gleefully as all these Labour policies that won’t affect me affect all those people on here who cheered on Labour for adding VAT to private school fees - not so fun now it’s you is it?

i have a child will SEN who I pay to go to a private school else she wouldn’t be able to access school at all. Due to that, I live in a shithole and have no savings so Rachel’s latest ideas won’t affect me

MidnightPatrol · 18/08/2025 20:53

Ah good another penalty for living in an expensive part of the country.

Something needs to be done about stamp duty - it’s ludicrous in London now. Six figures for what are quite ordinary family homes. it stops people from moving.

Under this system those homes would be paying £10k+ a year in tax - so possibly better if you want to move frequently, less so if you stay put.

hangerup · 18/08/2025 20:53

@Letgoofmyblank the cliff edges are definitely a problem. I would also make the 30 hours and child benefit universal. The Tories frozen tax bands should be unfrozen but not sure if labour will stick to that. Labour won't touch VAT.

But growth is still going to elude us unfortunately. We have an aging population and public services that need a shit ton of investment.

Justchilling07 · 18/08/2025 20:54

HelpHedgehogsByFeedingThemCatBiscuits · 18/08/2025 20:35

I hate Labour

I don’t particularly like the conservatives.What exactly have they done, to not, deserve hate too.
Wasn’t it David Cameron’s bright idea to have a referendum to leave the E.U.And Boris being caught out lying and acting like a buffoon, that’s why Labour got in Sadly Labour have changed, no longer centre left, are now leaning more to the right.That’s why people are disillusioned.

Letgoofmyblank · 18/08/2025 20:54

Rhayader · 18/08/2025 20:47

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.

100% this.

A tax on buying property or selling property is equally disastrous. They both stop people from moving house!

hangerup · 18/08/2025 20:55

@SimoneHere I presumed the article was about England.

MidnightPatrol · 18/08/2025 20:55

AMiddleClassWomanOfACertainAge · 18/08/2025 20:50

Genuinely curious, how is economic productivity impacted by housing costs? The worker going to work to make widgets for example, why would she be less productive because her rent is higher than last year?

Show quote history

Innovation and entrepreneurialism.

People don’t take risks when they’re barely making ends meet.

hangerup · 18/08/2025 20:56

Tax and spend, tax and spend. Useless clowns. Vote Reform.

🤦🏻‍♀️ yeah because low taxes and well funded services are not a unicorn!

idratherbedrawing · 18/08/2025 20:56

AMiddleClassWomanOfACertainAge · 18/08/2025 20:50

Genuinely curious, how is economic productivity impacted by housing costs? The worker going to work to make widgets for example, why would she be less productive because her rent is higher than last year?

Show quote history

It does, quite a lot of research about it

https://www.economicsobservatory.com/how-does-the-housing-market-affect-uk-productivity Has a nice summary. Where we live – and how much that costs us – affect our ability to work, to find suitable jobs and to access good schools. House prices also influence whether money is invested in property or in developing businesses. All this means that the housing market has a big impact on national productivity.

this study of London shows declining housing affordability has a negative impact on Londons productivity https://www.london.gov.uk/sites/default/files/2024-11/240927%20GLA%20Housing%20Productivity%20-%20Report%20FINAL.pdf. We are seeing this in recent low growth in the capital - basically if people can’t afford to live here the city suffers

How does the housing market affect UK productivity? - Economics Observatory

Where we live – and how much that costs us – affect our ability to work, to find suitable jobs and to access good schools. House prices also influence whether money is invested in property or in developing businesses. All this means that the housing ma...

https://www.economicsobservatory.com/how-does-the-housing-market-affect-uk-productivity

GETTINGLIKEMYMOTHER · 18/08/2025 20:57

Around here you can easily pay £500k+ for a nothing remotely special 2 bed flat, in a nothing remotely special area.

Letgoofmyblank · 18/08/2025 20:57

hangerup · 18/08/2025 20:53

@Letgoofmyblank the cliff edges are definitely a problem. I would also make the 30 hours and child benefit universal. The Tories frozen tax bands should be unfrozen but not sure if labour will stick to that. Labour won't touch VAT.

But growth is still going to elude us unfortunately. We have an aging population and public services that need a shit ton of investment.

Yes but we can try with growth, and currently we’re not trying.

the childcare thing I agree on too. Getting rid of the high marginal bands doesn’t have to be a tax break for the wealthy. Up the higher rate of tax to pay for it. It makes so much sense to do so (but would break Labours stupid electoral pledge so they’ll not do it. They’ll introduce an overly complicated alternative which will raise a fraction of what is needed).

Nogg · 18/08/2025 20:59

SimoneHere · 18/08/2025 20:50

£28,350 in Scotland.

And if you go a bit higher to £750k (not unreasonable in Edinburgh), stamp duty is:

£27,500 in England
£48,350 in Scotland

So it is this extra that they are after. Scotland has proven that people will pay it.

We also have top rate income tax of 48%

I don’t begrudge the income tax, but I think the property tax is poorly thought out because of the impact on the housing market. It further inflates prices.

Show quote history

People pay it in Edinburgh begrudgingly because you have no choice. But you get more for your money than SE. Stops people moving though for jobs etc. Probably also keeps houses prices down at higher levels. Also these tax levels in house prices in London could not be managed with equivalent Scottish LBTT rates. If people think Reeves and labour are bad you should try the SNP and their progressive taxes on ambition.

Original poster

FridayFeelingmidweek · 18/08/2025 20:59

OldTiredMum1976 · 18/08/2025 20:53

Well i just watch gleefully as all these Labour policies that won’t affect me affect all those people on here who cheered on Labour for adding VAT to private school fees - not so fun now it’s you is it?

i have a child will SEN who I pay to go to a private school else she wouldn’t be able to access school at all. Due to that, I live in a shithole and have no savings so Rachel’s latest ideas won’t affect me

It's not really gleeful is it, it's actually really sad. Anyone could see that by adding VAT to private schools would mean extra burden on state schools, especially with more SEND children as there simply isn't the money or staff instatefor their needs. Plus teachers in state leaving in their droves from stress and piling SEND issues. Very sad. Not gleeful.

Separate comment. Glad your son is doing well though, so many people would want to do what you can so that's lovely. School is such a tricky place for children with needs, I imagine you sleep better knowing he is well looked after.

OP posts:

Fandango52 · 18/08/2025 20:59

I read the article you linked to, and I don’t understand how the tax is meant to work. I realise the govt is still in the very early days of thinking about whether to introduce the tax, but how would it work? Does it mean people get taxed twice? E.g. they pay stamp duty when they buy their property and then get taxed again when they sell (which was one of the suggestions mentioned in the article)? That doesn’t seem fair, especially because wheb you’re selling, it’s normally because you’re moving somewhere else, on which you’d have to pay stamp duty as well.