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.

Sounds like a pre planned leak to see what the public think.

Rachel I think your tax will serve to cause further stagnation in the housing market. People that might have moved will wait until your poisonous little government is turfed out. Which means stamp duty collection will go down and your coffers will remain largely unchanged. Hope that helps!

Where did you see a proposal to pay it annually? I don’t see it in the article

A further thought. We paid stamp duty to buy this house. And now we’d have to pay this tax to sell it - so paying twice!

Is this just a repackaging of the mansion tax Labour have always had wet dreams about?
It will be sold as an incentive to get boomers to downsize etc, but we all know what it is.
Private schools and mansion taxes, is that still really all they have got?

That is what I thought - but the proposal seems too vague to lead to any helpful feedback.

I suppose this thread gives feedback on imaginary taxes that people think are being proposed?

I’m not suggesting it is- I have simply picked the first 2 that would screen shot. The one below is a 1990s 4 bed detached.

a very lovely 4 bed detached, lucky person who lives in it. But you can absolutely buy a 4 bed detached in the south east for £500k as well, as that will be lovely too.

just putting the prices into perspective. £500k isn’t an excessive budget in much of the country.

I think reforming some of the UK's, frankly, bizarre and overly complex systems is LONG overdue to rebalance things.

Income taxes, Council taxes and stamp duty definitely fall into the top 3 for me.

I am not particularly keen on any major political party, but I have found it refreshing that Labour is attempting to grab the nettle by the stem and start pulling apart some of the messy, barely-holding-together systems we have in this country and asking what could make it better.

We need more of this.

The current system was always going to be unsustainable, and the cards are starting to wobble.

I'm in favour of anything that re-balanced income vs. wealth taxes (and yes, tackle other things like corporate tax issues at the same time..). Accepting our current batshit systems need to change is brilliant in my opinion.

I once tried to explain to a colleague (not from the UK) how our council tax system and they couldn't wrap their head around how the valuations all link back to some random drive-by guess that happened in the early 1990s - they thought I was joking.

So - yes, bring on the stamp duty revolution.

We should be asking how and who got us into such a mess in the first place tbh. And when we get out of it, stop us getting into such a complicated, over-adminstered shambles again. I doubt it'll happen though.

Well, you re not being respectful, far from it.... so nope.

I'm right.... ONS, IFS, OECD all back those numbers.

On migration, we have had attract workers from Asia Africa etc and they were bringing dependents, hence migration went from approx 240k pa to 1m plus under Sunak/Bojo.

Hence their changes to dependents and min salaries.....

Its all out there.....

A 500k home does not equate to wealth, there are new homes being built in our village going for over 400k and I'm in the North West of England

If its brought in though, you dont think another government of another colour will remove it do you?

This is why opposition parties actually quite like governments raising tax, it means they dont have to be the ones to do it.

Yes, and Heaton Park is one of the few parts of Stockport that isn’t a rancid shithole, so you pay a premium for that…

You take out a tax free percentage, and then pay income tax on what you take out yearly.

Yes 75% of it is subject to tax, but not at 75%.

People frothing on forums is feedback, no matter how incoherent.

Newspaper articles.

Man on the street chunterings.

All 'helpful' feedback.

We are thinking about moving in the next 2y.

DH told me this morning that this latest news is just the cherry on top of all the previous tax raises (especially private school vat) and that should look into moving abroad. We both have EU citizenship so not an issue to move/work there.
We are two net contributors (by far) so hopefully Labour has planned for a loss in tax revenue aspart of their ‘tax the rich’ approach.

It all makes sense when you remember that none of the cabinet has had an original idea since their days in the sixth-form debating society. 🙄

But it’s all the rubbish. They are widening the net now.
Next will be getting rid of grammar schools…

You don't know the rate, or how it would impact other taxes.

It is bonkers to tax larger properties in an era where multigenerational living is coming back into fashion and actually helps the taxpayer.

Making landlords pay a tax on value in London? Absolutely crazy idea when a lot of people are renting out places at cheaper values because they bought the properties years and years ago. Where are all those tenants meant to go?

I think what would be a good idea is that people get credits for stamp duty they have paid and so you get a lifetime credit for it and it does not stop you moving for a better job etc or downsizing when you need to.

paying a proportional tax toward local services on house values below £500,000 and a national levy on the value above

The local tax is capped at £500k so you do not add the 0.44% to the 0.54% on the value above this.

They should probably have made this explicit in the summary.

Also their proposal is for the threshold to go up with inflation … but in practice every Chancellor will leave it fixed, so we all pay more tax over time.

There will be lots more of this to look forward to in the run up to the budget.

Is multigenerational living coming back into fashion? Or is that just a fancy way of saying old people wont downsize and young people can't afford to move out?

It really depends where you live and how much you make. A single person in California making $200K, admittedly a very good salary, has an initial tax burden after standard deductions of over $70K. (Online tax calculator)

Then there is property tax if they are a homeowner. It varies but if the home is commensurate with income this will likely be at minimum another $20K pa. Don’t forget about medical insurance and medical expenses.

Married couples fare better under the US system and there are good deductions for children and for mortgage interest that I haven’t factored in. But Brits forget about all the components of the US tax system

Depends how unpopular it was. I bet you could make undoing a very unpopular tax part of your election manifesto and do rather well off the back of it.

I didn’t say it was. Read what I wrote not what you think I wrote. Only 25% of your pension pot is tax free, ergo you pay tax on 75% of it.

No, I didn't understand it at all.

If you draw your own pension you pay your marginal tax rate, it's not 75% in the UK.

Thanks to IHT (and now most likely gifts on taxation) your kids will likely have to pay 75% tax or whatever.

So this PP (and me) are saying that the best strategy now is to estimate how much you might need to live on through retirement and stop working as soon as you have this amount. If you run short you can take equity or go on benefits.
It's horrific for the economy but that's behavioral impact of taxes.