Page 30 | 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.

Closetoknowing · 19/08/2025 11:53

Maddy70 · 19/08/2025 10:43

This is a good idea. Tax has to comw from somewhere and this won't affect the lower and middle earners

The lower and middle earners will be affected, and should be affected if others are. In fact as I said earlier - income tax needs to be increased. Everyone needs to pay in to society.

’… the direct tax burden on average earners is below where it has been for most of the last 50 years.
**
There is even less truth than usual in the simplistic mantra that any additional taxes should come not from “working people” but solely from those with the “broadest shoulders”.
**
That’s just another example of the long political tradition of pretending that “we” the people, can have our cake while “they”, the others, pay.

No country raises more tax than we do without taxing working people more than we do. ‘

https://ifs.org.uk/articles/drastic-times-need-drastic-action-breaking-50-year-tax-taboo

usersame · 19/08/2025 11:53

Last time we moved (in London), the uncertainty caused by Brexit was affecting the housing market, meaning we paid over £380,000 in Stamp Duty because the new house was charged as a 'second home' (because the sale on the old house has fallen through). When we did sell it, there was no rebate as we didn't sell the first house quickly enough.

twistyizzy · 19/08/2025 11:54

Bambamhoohoo · 19/08/2025 11:50

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)

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If you have no mortgage/rent then a household income of 24K is doable to pay bills based on dual income household. Without our mortgage our total bills come to 1.1K per month. That would leave £900 disposable income each month for a family of 3.

Anyway it's an outlier because most people can't do that obviously BUT it proves it can be done!

frozendaisy · 19/08/2025 11:54

Bambamhoohoo · 19/08/2025 11:50

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)

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You and up your contributions so you are in a lower tax bracket, or at least paying less and less tax.

So say you pay £1000 tax, it's not in your hand, you can adjust your pension contributions so a lot of that £1000 goes into your savings and less into the tax man's pot.

It's not that you pay no tax, it's you make adjustments so that you benefit personally in the future more than the tax man benefits now. And if you put your pension into the right place it makes money and you don't lose it.

nearlylovemyusername · 19/08/2025 11:55

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

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This strategy needs review now:

Govt mulls idea of lifetime cap on gifting - FTAdviser

Pensions are already subject to IHT, if they change gifting rules than your DC are likely to pay 40% of IHT on your pension and then their marginal tax rate on withdrawals, so it's 64% tax.

With this insane government it makes sense to calculate how much you might need given your general health and your family life expectancy and then retire as early as you can.
People here cry to tax more to support poor - well, if you run out of your pension then you'll claim

twistyizzy · 19/08/2025 11:57

RedToothBrush · 19/08/2025 11:52

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.

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You said I had it in for you yet you've just referenced me again by saying "it is pure ignorance or personal chip on the shoulder to wang on about the comparison with private schooling"

Either stop referencing me or stop bleating on about me having it in for you! You can't have it both ways!
FYI your arguments don't stack up.

Bambamhoohoo · 19/08/2025 11:58

twistyizzy · 19/08/2025 11:54

If you have no mortgage/rent then a household income of 24K is doable to pay bills based on dual income household. Without our mortgage our total bills come to 1.1K per month. That would leave £900 disposable income each month for a family of 3.

Anyway it's an outlier because most people can't do that obviously BUT it proves it can be done!

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Well of course technically it can be done and I don’t doubt there are a few people in the country who can do it.

I feel it’s unlikely to be the people who last year were paying £30k a year for school fees as per the second example, but I’m sure someone can find a way to make that real too.

frozendaisy · 19/08/2025 11:58

nearlylovemyusername · 19/08/2025 11:55

This strategy needs review now:

Govt mulls idea of lifetime cap on gifting - FTAdviser

Pensions are already subject to IHT, if they change gifting rules than your DC are likely to pay 40% of IHT on your pension and then their marginal tax rate on withdrawals, so it's 64% tax.

With this insane government it makes sense to calculate how much you might need given your general health and your family life expectancy and then retire as early as you can.
People here cry to tax more to support poor - well, if you run out of your pension then you'll claim

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This is sort of I think what we are going to do.
H has worked out how we can pay for things for the growing kids without it being taxed and we will run down the pension pot to death, or below IHT with everything thrown in.

Justchilling07 · 19/08/2025 11:59

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.

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Yes, exactly, you’ve just summed it up, which l was trying to get across, but l’m afraid l got a bit waffly
Agree, people on low incomes, are not managing, so their wages are being topped up by UC, as they can’t live on the money they earn, it’s the tax payer, who’s subsidising businesses and landlords, through in-work benefits.Here lays the problem.Instead of blaming, people getting in-work benefits, wouldn’t it be a solution to stop subsidising the businesses who are relying on their staff to get UC top ups and greedy landlords.

Bambamhoohoo · 19/08/2025 11:59

frozendaisy · 19/08/2025 11:54

You and up your contributions so you are in a lower tax bracket, or at least paying less and less tax.

So say you pay £1000 tax, it's not in your hand, you can adjust your pension contributions so a lot of that £1000 goes into your savings and less into the tax man's pot.

It's not that you pay no tax, it's you make adjustments so that you benefit personally in the future more than the tax man benefits now. And if you put your pension into the right place it makes money and you don't lose it.

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I understand how pension contributions work. 2 posts claimed they pay so much into their pensions they pay zero income tax- that’s what I was asking about.

twistyizzy · 19/08/2025 11:59

Bambamhoohoo · 19/08/2025 11:58

Well of course technically it can be done and I don’t doubt there are a few people in the country who can do it.

I feel it’s unlikely to be the people who last year were paying £30k a year for school fees as per the second example, but I’m sure someone can find a way to make that real too.

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But as I stated before, this is exactly what a couple of of friends who previously used independent schools have done. They aren't now paying school fees so can live very frugally.

Closetoknowing · 19/08/2025 12:00

nearlylovemyusername · 19/08/2025 11:55

This strategy needs review now:

Govt mulls idea of lifetime cap on gifting - FTAdviser

Pensions are already subject to IHT, if they change gifting rules than your DC are likely to pay 40% of IHT on your pension and then their marginal tax rate on withdrawals, so it's 64% tax.

With this insane government it makes sense to calculate how much you might need given your general health and your family life expectancy and then retire as early as you can.
People here cry to tax more to support poor - well, if you run out of your pension then you'll claim

Show quote history

Totally agree. win win really .. earlier retirement is nicer and the gvt get less of our cash.

twistyizzy · 19/08/2025 12:01

Bambamhoohoo · 19/08/2025 11:59

I understand how pension contributions work. 2 posts claimed they pay so much into their pensions they pay zero income tax- that’s what I was asking about.

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No i claimed I know people who have done it and I gave my circumstances as an example. DH and I are mugs because we are trying to soldier on with school fees

Primrose86 · 19/08/2025 12:03

Onward’s “horizontal” proportional property tax to replace council tax and stamp duty is a new idea. It would see homeowners - not tenants - paying a proportional tax toward local services on house values below £500,000 and a national levy on the value above. A minimum payment of £800 for any house would be set to help fund local government. The local rate would be set by councils, but an average rate of 0.44% would replace council tax income. The national rate could be 0.54% for homes between £500,000 and £1 million, and 0.81% on any value above.

I own a 400k 2 bed flat in London and barnet council tax band c. It's 1800 per year. This property tax would be £1760. So no diffrence really. Most young people in London wouldn't be affected either as average first time buyer spends 450k

I think it's fair.

MyNameIsX · 19/08/2025 12:03

The more tax that Reeves loads on to people, the better.

Bambamhoohoo · 19/08/2025 12:05

twistyizzy · 19/08/2025 11:59

But as I stated before, this is exactly what a couple of of friends who previously used independent schools have done. They aren't now paying school fees so can live very frugally.

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Yes I knew they’d be the ones to reduce their lifestyle to one funded by £12k per annum per working person. CHINNY RECKON

Closetoknowing · 19/08/2025 12:05

twistyizzy · 19/08/2025 12:01

No i claimed I know people who have done it and I gave my circumstances as an example. DH and I are mugs because we are trying to soldier on with school fees

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Be worth it in the end. Private schooled are closing ranks now, and will be prioritising (but not obviously of course) privately educated kids, in order to counter balance the misguided current Labour onslaught.

80smonster · 19/08/2025 12:05

It’s a London and South East tax. Maybe it will encourage people to move north (maybe). As others have said there is already a top rate of stamp duty you pay when purchasing a house over 500k, now they want you to pay twice since this would mean a property tax on sale and purchase as opposed to just purchase (obviously you paid stamp duty when you bought the house you are selling), which your buyer of course pays when buying from you. They are desperate not to raise taxes for everyone, when that is exactly what they need to do. If the economy moves any slower it’ll need a wheelchair, crippling property growth seems an odd move.

TheQuirkyMaker · 19/08/2025 12:05

Swiftie1878 · 19/08/2025 11:52

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

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How can you suggest Brexit has caused world problems? Lol! Brexit has just caused problems for the UK. No other countries care if the UK continues to shoot itself in both feet.

RedToothBrush · 19/08/2025 12:07

twistyizzy · 19/08/2025 12:01

No i claimed I know people who have done it and I gave my circumstances as an example. DH and I are mugs because we are trying to soldier on with school fees

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Its all about you and your hatred of school fees.

'Solider on'

You are not some kind of flipping martyr.

twistyizzy · 19/08/2025 12:07

Bambamhoohoo · 19/08/2025 12:05

Yes I knew they’d be the ones to reduce their lifestyle to one funded by £12k per annum per working person. CHINNY RECKON

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Oh get lost. Because we are all hugely wealthy earning 6 fig salaries aren't we 🙄.
Nothing further to add here.

Chimney24 · 19/08/2025 12:08

billysboy · 18/08/2025 20:44

I am currently buying a 3 bed house with a stamp duty of £37500 !
no doubt it be spent by the government wisely!

Yes and your house costs just under £1mil, forgot to add that detail in...

MyNameIsX · 19/08/2025 12:09

500k is too high - Reeves should lower it to 250k.

1457bloom · 19/08/2025 12:09

80smonster · 19/08/2025 12:05

It’s a London and South East tax. Maybe it will encourage people to move north (maybe). As others have said there is already a top rate of stamp duty you pay when purchasing a house over 500k, now they want you to pay twice since this would mean a property tax on sale and purchase as opposed to just purchase (obviously you paid stamp duty when you bought the house you are selling), which your buyer of course pays when buying from you. They are desperate not to raise taxes for everyone, when that is exactly what they need to do. If the economy moves any slower it’ll need a wheelchair, crippling property growth seems an odd move.

Exactly, they need to raise taxes on everyone and that means increasing income tax.

DrPrunesqualer · 19/08/2025 12:09

Letgoofmyblank · 19/08/2025 06:24

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.

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The little old lady sitting in a 2mill house ( I have no idea why it has to be a little old lady but hay )
won’t have to pay if she’s in the house before a policy like this is introduced
As the author states if you’ve already paid stamp you are exempt from this system

There's no mention of what you do pay so as I’m guessing it’s not zero she’ll just be keep on the old council tax system

There will therefore be lots of movement at the lower end of the housing market but very little above £1mill
For those who have to move for work etc in large ( expensive) properties they could end up losing money on their sale.