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.

Ha ha love this post.

Lets hope so, spiteful policy’s finally impact on spiteful people.

It’s not even about ‘a tax break for the wealthy’ - people earning over the £100k threshold already pay about 50% of all income tax.

The value of the free childcare is now so huge, there’s actually no point earning between something like £100-150k if you have a 1 year old and a 3 year old a nursery. You are no better off than if earning £50k less and claiming free hours.

And - where do you increase the tax rate on this group, they already top out at 62% between £100-162k which is a disincentive to additional work in itself!

They are an absolute shit show.

Stifling growth, punishing anyone with aspirations and those who have saved for their futures.

They are crippling the business people creating jobs.

They are utterly clueless.

You’re watching gleefully! That’s a horrible thing to say, want!! I don’t know anyone who hasn’t been affected by Labour’s policies, it’s not just you!
But again didn’t the conservatives do so well when they were in government, how long was it, 14 years!🙄

I'm in the SE, £500,000 where I live buys you a very modest 3 bed.

& no, why would it have been bought for a lot less?

Hmm, you don’t sound at all spiteful!🙄

£500k will get you a 2 bed bungalow or 3 bed semi here so nothing spectacular. That's the reason we live in a 1 bed flat that we'll never be able to move from!

@StrokeRecovery25 My MIL has a 3 bed it’s worth about 550k as it’s in Surrey. Where we live it would be approx half that.

So that wouldnt be paid now by the buyer under these suggestions, but probably a similar amount paid by the seller?

How will this raise extra money? For us it's a little less than we currently pay in council tax and if we move we wouldn't have to pay stamp duty under your system

Sounds as if this is intended as a local property tax to replace council tax?

@AMiddleClassWomanOfACertainAge

so on an individual level someone paying more in a mortgage or rent is money that could be spent on the wider economy. And we have a service economy.

On a wider level higher housing costs reduces mobility. And we have the double whammy that unlike a lot of other European countries we only really have one city with a high concentration of jobs. It's expensive for skilled workers to move to London & expensive for businesses to set up & trade.

Low interest rates meant that government and business didn't invest in employees or services and assets were inflated. You need to invest in staff to increase productivity.

Then there is the whole intergenerational inequality aspect where people who got on the ladder at the right time earn more through a house vs their job.

😲

I’m in the boat of having to pay for one of my children to be educated privately due to SEN. It’s the only way he could get an effective education. Having to pay for him to access education which should be available in a state setting is frustrating enough, but the VAT takes the biscuit. It’s incredible the difference it has made though.

It’s still a shit hole though.

What would reform do differently?

Yes. “If we can’t all be rich let’s all be equally poor”.- that’s Labour.

Stamp duty is a generally disliked tax and there is widespread agreement it stops people moving which in turn means people tend to stick around in areas where there might be fewer jobs rather than move to somewhere where there are jobs, and it also stops people downsizing and by the time you’ve paid stamp duty it isn’t worth it.

property taxes of one form or another are fairly common in a lot of western democracies. It’s genuinely not a bad idea. Obviously you do have the problem that property isn’t cash and you need cash to pay the property tax, but people manage to pay council tax, so….

Perhaps there should be a penalty for living in the most expensive part of the country?

I live in the south east. None of us have to live here. The North east is under populated in many parts and needs people to move to it and housing is much cheaper

I was priced out of London which is my home town/city.

having read the article it says at least £800 a year in council tax on a £500k house. I was paying £900 as a single person 10 years ago. So it is unfair that some of us are paying a lot and in some areas they are not. But I dread any new system because no ones will go down
£500k doesn’t buy you much in parts of the north either and if they bring this in there will be plenty of us who have paid stamp duty buying a house and then the new tax to sell it. It’s not going to help economical mobility. People need to be able to move easily and cheaply for work.

I listened to Radical with Amol Ragan where he talks to Paul Morland about demographic shift and where things are headed very soon as the baby boomers retire and there are less and less workers to carry the financial burden of caring for the elderly and its only going to get worse. Very interesting listening BBC Radio 4 - Radical with Amol Rajan, Grey Britain: Do We Need To Have More Children? (Dr Paul Morland)

This is how Australia does it and it is fairer. They still have Stamp Duty but it’s not as crazy as it is here.

Why should people though? I was born in the South and have no desire to move up North..

I'll just leave my elderly uncle to it and move away then 🙄

Why should there be a penalty for living in expensive areas? Areas are usually expensive because they are near hubs of economic activity ie people working, jobs etc!

And I’d query the idea the North East is short of people and needs people to move there - what jobs would these newcomers do?

I was gentrified out of the area I grew up in too - half of Britain can claim that experience now.