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Share your dilemmas and get honest opinions from other Mumsnetters.

Reeves' plan to tax houses over 500k

1000 replies

FridayFeelingmidweek · 18/08/2025 20:25

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.

Reeves considers replacing stamp duty with new property tax

Exclusive: Treasury examines options including tax on homes sold for more than £500,000 as well as overhaul of council tax

https://www.theguardian.com/money/2025/aug/18/rachel-reeves-stamp-duty-property-tax-council-tax

OP posts:
Thread gallery
18
Bambamhoohoo · 19/08/2025 11:42

AugustIsNeitherHereNorThereIFeel · 19/08/2025 11:41

How so, because I pay so much into my pension that I pay ZERO tax. How’s that benefitting Labour.

🤔 how is that possible?

agree with the poster they want you to put it in a pension. Long term planning

NaughtyTortieOwner00 · 19/08/2025 11:43

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

Sounds like a really bad idea then.

3 bed terrace where I grew up in midlands £350,000 - my siblings are in HA housing and I'm in a much chaper part of the country though prices have gone up a lot here as well. So while much cheaper tha SE out of league of many locals.

They've gone up a lot where I grew up as it's just about commutable from London - so locals get pushed out as people migrate from further south. It's what happening where I live as well - there's not much local work but prices are rising because nearby cities have really high high prices.

In areas DH and I grew up in - different part of the midlands prices have risen so locals really struggle to buy however there is a lot of build mix of very expenive 4/5 bed excuatiev housing and HA housing.

Everyone moans endless about the high house prices compare to local salaries but also about the house building all over counrtyside.

Justchilling07 · 19/08/2025 11:43

AntikytheraMech · 19/08/2025 11:07

I can't understand why the government don't implement a training and apprenticeship set of skills for the unemployed or non-working or even mildly disabled to be able to manage government funded property building for social housing, with the able being able to learn carpentry or bricklaying or plastering or electrical work or gas work or any number of skills, with the less able being trained to do things like budgets and design and spreadsheets for all the multitude projects, or project management.
That would potentially kill two birds with one stone and also leave a population who previously didn't work with valuable skills that could go on to the open market which are not necessarily affected by future AI skill superiority.
Something I would investigate if I was a prime minister!

Sounds good.To train to be a fully qualified electrician, from what l can gather, takes up to 4 years.Obviously any training courses cost money, where is this going to come from, whilst training, people would still be on benefits.Getting people back into work, are now minimum wage jobs, where are all these jobs skilled jobs.Point being training schemes is a big investment The government and previous, just want people to work in minimum wage jobs, not to help people better themselves.
The crux of it is, people who have children, working in minimum wage jobs are not managing, without financial support, like universal credit, to help pay their rent There are many people, in minimum wage jobs and they’re claiming UC, why?

soupyspoon · 19/08/2025 11:43

Hedgehogbrown · 19/08/2025 11:34

Sorting out who pays what with feckless housemates, collecting council tax off them, dealing with students who move in and don't have to pay, making it more for everyone else. Trying to get someone name taken off when they have done a runner and the council won't do it because they need their signature. It will be so much better. There is a limit to how much rent people can actually pay. Landlords can raise the rent only so much before people just leave and move somewhere cheaper.

Well there isnt anywhere cheaper is there? Landlords have mutliple applicants for each property, demand is high, it has become much higher with landlords selling up.

As I said much much earlier the solution to a vast amount of income inequality, housing issues and wider social problems in this country is a VAST social housing building programme.

Goldwren1923 · 19/08/2025 11:44

BIossomtoes · 19/08/2025 11:37

But nobody will move here will they? Because according to you commuters are idiots.

No, I said people are NOT idiots to pass up on genuinely cheap houses in genuinely commutable locations.

however for a lot of people extra cost of commute and extra cost of additional childcare needed for the time of commute outweighs any savings in property costs. And I’m not even talking about other reasons to stay in London.

BIossomtoes · 19/08/2025 11:44

Digdongdoo · 19/08/2025 11:41

House prices in the commuter belt are catching up with London and the rail system is extortionate and barely coping as it is. It's not the saving it once was.
Your £1m+ house in Cambridgeshire isn't particularly replicable for the average commuter these days as you well know.

I don’t have a £1 million + house. The rail system here is excellent, usually on time and rarely cancelled.

AugustIsNeitherHereNorThereIFeel · 19/08/2025 11:45

Bambamhoohoo · 19/08/2025 11:42

🤔 how is that possible?

agree with the poster they want you to put it in a pension. Long term planning

Because I can pay up to 85% of my salary into my company pension, leaving me an amount that totals below the threshold for paying tax.

nearlylovemyusername · 19/08/2025 11:46

BIossomtoes · 19/08/2025 10:14

Oh, do stop being so rude. There’s absolutely no need for it.

Nobody needs to live in London, it’s not a God given right. If you can’t afford it you live elsewhere and commute, that’s the reason that the tax take is disproportionate to the population.

Oh the level of entitlement.

you live elsewhere and commute

My former colleague was on £100k pa in London.

Paid £32k tax pa.

Couldn't afford to buy. Moved to Midlands, obv moved jobs, got £65k in pa there. Bought gorgeous detached for 450k there (which would be about 1.5-2m in London).

Pays £12k tax now.

What if many of us London MC suckers do the same?

soupyspoon · 19/08/2025 11:46

Hedgehogbrown · 19/08/2025 11:38

Good. Let them sell. Then house prices will crash and people on normal incomes will be able to afford to live somewhere nice. I have no sympathy for anyone who wants to make money of someone's need for shelter.

Can you set out the maths for this. I ask this on every thread where someone makes this claim

Give the numbers and percentages of the house price drops, average incomes, multiples of lending to evidence this.

twistyizzy · 19/08/2025 11:47

AugustIsNeitherHereNorThereIFeel · 19/08/2025 11:45

Because I can pay up to 85% of my salary into my company pension, leaving me an amount that totals below the threshold for paying tax.

Yep and that's exactly what a few of our friends are doing.
Withdrawn children from independent schools due to VAT and are funnelling majority of wage into pension so now doesn't pay any tax plus taxpayer now funds the education of their children. They can live off much lower salaries cos no longer paying school fees and we live in a fairly low cost housing area.

Julen7 · 19/08/2025 11:48

EilonwyWithRedGoldHair · 19/08/2025 11:38

You realise the changes being discussed were come from a centre right think tank, according to the article?

Talking About Labour ideology.

Bambamhoohoo · 19/08/2025 11:49

AugustIsNeitherHereNorThereIFeel · 19/08/2025 11:45

Because I can pay up to 85% of my salary into my company pension, leaving me an amount that totals below the threshold for paying tax.

Ok so that’s obviously not realistic, you work for a small amount of cash to pay your living expenses 😂 obviously not everyone has someone else paying their bills to be able to do that. Props for the level of pettiness that leads someone to do a job and take no income for 30 years just to avoid paying tax though

TheNoonBell · 19/08/2025 11:49

EmpressoftheMundane · 19/08/2025 10:53

JFC! This would radicalise me. It’s a total inversion of what it means to be a citizen. It’s craven, desperate and stretching the boundaries of incredulity. If this line is crossed, everything is liquified. Nothing means anything snd our basis of the nation state, law and structure is completely subverted.

It's ongoing, here is the latest I could find from July this year.

‘Labour’s plans for electoral reform must include voting rights for all residents’

Earlier this month, Labour released a policy paper detailing their strategy on democracy and elections. While the electoral reform plans are a step in the right direction towards a more inclusive democracy, they still exclude over four million voters; residents I have the opportunity to connect with every time I am canvassing.

labourlist.org/2025/07/voting-rights-uk-residents-elections-bill/

InveterateWineDrinker · 19/08/2025 11:50

It would just be a lot simpler to remove the exemption from Capital Gains Tax on primary residences.

Bambamhoohoo · 19/08/2025 11:50

twistyizzy · 19/08/2025 11:47

Yep and that's exactly what a few of our friends are doing.
Withdrawn children from independent schools due to VAT and are funnelling majority of wage into pension so now doesn't pay any tax plus taxpayer now funds the education of their children. They can live off much lower salaries cos no longer paying school fees and we live in a fairly low cost housing area.

Edited

You can only pay £60k a year into a pension tax free.

if someone is putting all of the majority of their wage in and staying under they’re pretty mid earners (who bizarrely, presumably have no bills to pay)

twistyizzy · 19/08/2025 11:50

Bambamhoohoo · 19/08/2025 11:49

Ok so that’s obviously not realistic, you work for a small amount of cash to pay your living expenses 😂 obviously not everyone has someone else paying their bills to be able to do that. Props for the level of pettiness that leads someone to do a job and take no income for 30 years just to avoid paying tax though

Depends on individual circumstances though doesn't it. Live in area of low cost housing with no mortgage, low or no commuting due to wfh etc = don't need as much income.

frozendaisy · 19/08/2025 11:51

Badbadbunny · 19/08/2025 11:27

Trouble is we have too many people who aren't "working hard", i.e. young, old, early retirees, unemployed, disabled, etc. The answer is to get people who CAN work to actually work. We can't keep expected the minority (i.e. workers) to keep paying for the majority who don't.

Doing what exactly?

DrPrunesqualer · 19/08/2025 11:51

FullOfLemons · 19/08/2025 10:41

Your calculations look wrong

The national rate could be 0.54% for homes between £500,000 and £1 million, and 0.81% on any value above.

On property sold for £600k that would be approx. £800 + £500, on £1m it would be £800 + £2500 and on £1.5m it would be £800 + £2500 + £4000.

I don’t think they are unreasonable numbers as a replacement for both stamp duty and council tax.

The Guardian article provided by the OP explains that this is one of the proposals under consideration.

I do however share some of your skepticism around both Mr Leunig and the likelihood of this happening.

According to your link there are two rates
One for local councils @0.44 plus one for central Government @0.54 ( do they each set and get their money. It’s not one % that they share )

The local rate he gives us an average for the country

So added together they come to 1% for properties between 500 and 1mill

Then it goes up again over 1mill

Bambamhoohoo · 19/08/2025 11:51

twistyizzy · 19/08/2025 11:50

Depends on individual circumstances though doesn't it. Live in area of low cost housing with no mortgage, low or no commuting due to wfh etc = don't need as much income.

Not really, you’re talking about living on £12k a year, below minimum wage and similar to the state pension. I don’t think that depends on circumstances, that’s either an impoverished lifestyle or someone else (a taxpayer) paying for it all

Goldwren1923 · 19/08/2025 11:51

EilonwyWithRedGoldHair · 19/08/2025 11:42

It's pointless taxing lower earners more - low earners are already having their wages topped up by UC as they can't live on the money they earn.

This is one of the problems we have, we spend a lot of money subsidising businesses (and landlords!) through in-work benefits.

No the problem is that huge parts of population are now getting UC top up and other parts of population are now getting benefits so there’s a back breaking bill for benefits so the taxes keep rising and rising for everyone including same workers

askmenow · 19/08/2025 11:52

Letgoofmyblank · 18/08/2025 21:30

They don’t follow the advice they’ve been given. They weigh up the advice given with the focus groups and vote for what voters think they want (higher taxes to be paid by anyone but them) rather than taxes that actually work. It’s so infuriatingly spineless.

They’ve all been to the same Uni’s, their advisors/numpties with no life/ business experience.

AND bad news never passes upwards!

We need people of conviction, radical lateral thinkers to reset the economy/ housing/benefits and painful adjustment of the public’s entitlement.

And a new Bank of England governor. Bailey is useless!

Swiftie1878 · 19/08/2025 11:52

TheQuirkyMaker · 19/08/2025 11:38

Covid and the Ukraine war didn't make the UK eject 290 thousand European seasonal and temporary workers each year, and replace them with about a million permanent immigrants each year from Asia, India and Africa. Covid and the Ukraine war didn't make the UK abandon the Dublin Agreement and lead to tens of thousands of small boats each year. If you think Brexit is going well, good luck to you!

If you think Brexit has caused the mess that the world is in right now, good luck to you!
Utterly bizarre and one-eyed.

RedToothBrush · 19/08/2025 11:52

soupyspoon · 19/08/2025 11:20

These threads always bring out the vague suggestions of 'downsizing'. As if every older person is living in one room under a blanket

We have a 3 bed semi. Its actually in the cheapest road in our area. I made a good choice there! (not).

So what would we downsize to, given that my OH snores so I want a separate bedroom, a 2 bed flat? These are only available further into the town, where property is a lot more expensive. We have pets so need outside space, we need storage for bikes so need a big enough garden for that. We also like gardening so need enough space for that. Unless of course in old age you're just expected to wither away.
Then there are the service charges of course, hugely expensive on flats. Many flats wont be ground floor whereas in our house we could easily reconfigure the downstairs if we get too old for the stairs. Would have to put in a bathroom etc but its doable.

A 2 bed house, again these are further into the town and would cost more than this current house.

So how to downsize? It would cost us more money, why would we do that?

If you want a three bed house around here, you will pay about £350k for something very small. Most small four beds start at £450,000. Its likely it'll breech £500k within about 18months.

But the problem there is there are only a very small number of houses that size. All they've built in many many places has been first time buyer homes OR huge executive houses. This has had a massive impact because young families simply can't afford the executive house their parents generation could typically afford. Instead they need smaller family homes which just haven't been built - this has pushed up the price of second tier homes and there is a particular shortage of this type of home.

I've actually campaigned locally about the problem and been told I was just trying to get a house for myself. As it goes, I wasn't - but I knew the position of my peers cos I understood the numbers. The people who tried to smear me were actively surprised when provided the figures as an example for them to look at in terms of who could afford those house. They simply did no understand the issue or the mortgage deposits/ratios etc. They were even more surprised when I didn't buy a house similar to the ones I was campaigning for.

The Nimbys have been trying hard to prevent the building of small houses too citing the fact that the roads can't handle it. I pointed out that actually the way the market was being so distorted by what was being built and the inability to staircase combined with a growing desire to downsize would lead to big properties eventually being divided because they were worth more that way and no one could afford the big house thus meaning they'd lose the argument on infrustructure in the long term didn't seem to register.

Its only when they've suddenly had a massive sharp decline in demand for school places here which is the opposite to less affluent areas of the same council that the local Nimbys woke up. They are trying to avoid schools being closed here completely. These are really good schools in nice areas. You need two professional jobs to live here if you are under 45. They struggle to recruit staff for local low paid jobs. The councillors have started to realise a lot of the community stuff isn't getting new blood because no one under 65 is moving here anymore. Cos they can't afford to. The area is well connected and there are jobs available. And guess what, the penny is starting to drop.

I've been on about this for over 10 years or so now.

Weirdly people tend to turn to private schools when they've effectively been priced out the good areas, instead of trying to campaign for the solution to the problem which is better schools and less disparity in schools and ridicilous house prices. And it always comes back to housing in this country. I want a solution to the problems of housing - not just for me but for others. Frankly we'll stomach a tax rise on a personal level.

For it to be a tax on wealth, it needs to actually be a tax on wealth. Not on those who still are trying to raise a family - we have enough issues with declining birth rates and concerns about immigration. If we don't have a climate which enables you to buy a house / rent somewhere affordable, save an adequate pension and have two kids you get all sorts of political instability. The affordability or lack of affordability of private schooling does not create any of these type of issues - theres still schools.

It is pure ignorance or personal chip on the shoulder to wang on about the comparison with private schooling.

MidnightPatrol · 19/08/2025 11:52

AugustIsNeitherHereNorThereIFeel · 19/08/2025 11:45

Because I can pay up to 85% of my salary into my company pension, leaving me an amount that totals below the threshold for paying tax.

I thought you could salary sacrifice to below minimum wage?

soupyspoon · 19/08/2025 11:52

InveterateWineDrinker · 19/08/2025 11:50

It would just be a lot simpler to remove the exemption from Capital Gains Tax on primary residences.

Yes thats a fair point

What is CGT now

So say we bought this house for about 130k I think, now it might be worth about 280k, say 300k on a good day

If I sold it tomorrow and had to pay CGT on the increase what would I pay

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