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.

Likely to include a lot of shared ownership, retirement properties and short leases.

You can get a two bed flat in various outer parts of London for less than £500k, it’s not exactly premium living however…

They’re still there. 🤷‍♀️

Yes, that's plenty.

For 9m population, about 3.5 households. Some of these flats are in shittiest areas you wouldn't want to ever go to with leasehold of about 10 years.

On a separate note, whilst London is home to 13% of UK population it already pays 26% of all tax receipts.

The average house price is the south-west is 350k. If you are unable to find something to meet your needs for 500k, you have high needs. What do you think the rest of us are doing exactly?! The average wage in my town is 30k.

This is the problem, using average house prices when house prices vary wildly even from one street to another. It is basic maths, when values vary wildly the average is a very poor measure. Do not judge everyone through your own lens, I actually have very reasonable needs and not every town is suitable for everyone from the work and lifestyle perspective.

How long until the next election ...?

That’s because people commute. You said you couldn’t find a two bed flat for £500k in London. I found nearly 12,000 in about two minutes. Just admit you were wrong, there’s no shame in it.

The article does say that but that is not what the actual proposal is.

In the article it links to the original paper:

"Sources said Treasury officials were, in part, drawing on the findings of a 48-page report from the centre-right thinktank Onward, which was published in August last year."

As far as that report goes, stamp duty is to be scrapped entirely for first homes and replaced by an ongoing charge for houses worth more than £500k.

So if you buy a house less than £500k then there will be no further charge to pay. If you buy a house over £500k then there is an ongoing charge based on the value of the house above £500k. So if you were to buy a £600k house then you would pay a charge based on 600k-500k=£100k

The proposal is that second homes or buy to let properties etc would eventually pay this charge even if they were under the £500k limit.

I'm always amused by English indignation over stamp duty charges.

The last property I bought in Spain, I paid €69,000 in their equivalent of stamp duty. For the same price property in the UK I would have paid £24,500. A bit of a difference. Conveyancing lawyers also charge a percentage of the property price so you normally pay them thousands.

You pay capital gains tax on your main residence when you sell unless you buy another one within 2 years (and the government keeps the difference until you buy!)

My equivalent council tax charges are lower than in the UK but as far as tax goes:

Spain has a €5,550 personal allowance. Between €20k and €35k in salary, your tax rate is 30% and 37% on €35k to 60k. And if you are self-employed, it's worse, as you not only pay the normal tax rate, but you also get to pay up to €400 a month for the privilege of being self-employed (even if you earn nothing) and you have to charge IVA (VAT) no matter how much you earn.

The average salary here is about €27k and properties are not cheap so I don't know how people survive.

Yes, that includes places like Cornwall where prices are crazy. The fact is that in a town where 30k is the average salary, 500k buys you an extremely large home, that is way beyond what 'normal people' can afford. I would also like to live elsewhere but I don't have that choice, because I can't spend half a mill on a house.

It's bonkers to me that are not seeing that your position is extremely privileged and exceptional.

Really because this says otherwise:

https://www.google.com/amp/s/labourlist.org/2024/08/labour-mps-union-donations-unite-gmb-unison/%3famp

It's called Google, lots on there which show donations. Not hard to find and multiple sources

The summary of this thread = everyone else should pay, but not me

You said it, the onus is on you to prove it. Did you tell your lecturers to provide your essay references?

It would be interesting to map the average cost of a family home and average disposable income of those families per council region. Stamp duty in Scotland must mainly be paid by Edinburgh and Glasgow. Why should the areas with high house prices fund public services when disposable income after housing costs in those areas is much the same as other areas?

Except that it’s not that simple. Means testing generally costs considerable resources and money, both of which are in short supply. As does encouraging people to apply for pension credit if they are eligible and had not previously applied. Other costs, such as the NHS; e.g an elderly person who now just misses out, genuinely can’t afford to keep warm enough, has an exacerbation of an existing condition and attends a&e. One a&e visit would likely cost more than the WFP.
The cost savings often aren’t as considerable as you might imagine.

You can get a two bed flat in various outer parts of London for less than £500k, it’s not exactly premium living however…

Things are overpriced but 500k would get you a flat in parts of Tooting, West Norwood, etc I would say they were bad areas in the sticks.

@MollyMollyMandy33 i disagree with the idea we should never means test because it's complicated.

Property isn't exempt from inheritance tax, it forms part of the estate, there is an extra allowance against IHT if the house is left to children or grandchildren (in most circumstances). There is no IHT between married couples so the house and everything else passes between them tax free.

@BIossomtoes These are only 3 few of them, many more such evidence available:

https://www.theguardian.com/society/article/2024/jun/28/tory-betting-scandal-labour-gambling-industry-regulation

https://www.thenational.scot/news/24624306.labour-took-1m-donations-gifts-gambling-firms/

https://care.org.uk/news/2024/10/labour-receives-1-million-of-gifts-from-betting-firms

We seem to be on the same threads frequently and I can say for sure you read everything literally without much comprehension.
I'm not wrong.

So to help you:

I did not say I could not find it - I said good luck with finding them.
Of course there are some 2 bed flats below 0.5m in London.
There are very few of them in context of population (0.3% of all households) and they are mainly poor size/quality/location/short leasehold. Not your mansions exactly.

If you try to find 3 bed property in London (too much to ask for a family?), then for the entire city of 8.9m population there are 3400 properties under 0.5m.

These properties aren't your luxury houses and I don't understand why their owners should pay the same tax as owners of 5 bed detached in NE.

That would involve difficult decisions and smart thinking.... so very unlikely from any government. All they know is how to spend on cr@p.

Talking in one thing, doing is another.

I live in a small two bed terrace that was £550k

Quite

There are 650 odd houses and flats, yes HOUSES and flats, within 3 miles of West Norwood, currently for sale, max price 500k, minimum bedrooms of 3, excluding shared ownership, auction properties and retirement properties

I really dont know what planet some posters are on when they come out with crap like you cant get a 2 bed flat in London for less than 500k

What the hell is 'premium living' in anycase, a nonsense idea and term and no wonder this country is so resentful and selfish when the only life one must have is apparently the premium life.

(I picked West Norwood because my attention was drawn to it from this post, the same would apply to most similar areas in London Im sure)