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.

The sentence makes sense because it's something I know to be fact, I said I was in the NW because a) the comment I was responding to was from someone saying they are in London and b) property is considered cheaper in the NW. Hope that clears up the confusion for you

It wasn’t the case for us at the London authority dh worked for (and I also worked for at times), or the neighbouring ones where we knew people. So many ended up leaving London when many of the London LAs sold off offices and went mainly remote, that’s when we left 5 years ago as well, it was the final push to move somewhere far cheaper where we didn’t have to rent.

it just so happened that the equivalent job came up in the LA where we live now, even they were surprised that the salary was the same here as in London.

I think some people are confusing the propsed levy to replace council tax and the separate suggestion of a tax on property sale.

Agree 100%....

Why wouldnt you pay tax on that as a theoretical query?

The Labour mantra. Apply to anything you can think of.

The modern trend is draw down pensions rather than annuities.

Labour going after an easy target (working people) again.
Our house is about worth that but are we supposed to pay the tax out of income?
Rich people won't care, poor people won't be affected and we get clobbered again
When will Labour grow a pair and go after the Multi Millionaires?

Inflation linked pensions are v expensive so most people don’t consider them worth it.

You can't answer the question, can you? Why shouldn't tax be paid on money which is unearned?

You said this

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

You said a 500k home doesnt equate to wealth. Well you need to be well off to buy it. No?
What are the multiples now, 5x? So you're on 80k plus, as you'd have a deposit to buy it. In what world is 80k not fairly well off.
What are the multiples for joint income, 4x? So each partner if in a couple would need to be on around 50k (assuming deposit of 100k of course)
The multiples are needing a higher income if your deposit is only 5%

You can be wealthy and livin the North West.

they got royally stitched up by conservatives not allowing them to do the things they’d promised. They never should have got into bed with them

There’s a link on page 16 of the thread by Lemon

According to the link on page 16. People who’ve paid stamp already would be exempt

So the buyer will be paying stamp duty (LBTT in Scotland- which is a lot more expensive) and the seller will be paying too? So that's a double tax if you are in a chain....

I'm confused.

From the link somebody provided earlier the proportional property tax replaces stamp duty (national rate) and council tax (local rate), and I get the impression there would be a monthly bill for both.

https://ukonward.com/reports/a-fairer-property-tax/

Is this a different tax?

Of course. Let’s see how reform and conservatives get on in the next coalition. I’m sore it will be wonderful. Thanks Labour 🙄

My understanding, which may be completely pie in the sky!, is that the council tax replacment would carry on, just like, now, probably wouldnt be much difference.
The stamp duty replacement would be charged monthly, but paid on sale.

Because in the link to the think tank it isn't a separate suggestion - they are described as two parts of the new "proportional property tax".

Yes, and obviously nobody would move until details are published and impact assessed. I guess my point was that after 15y here, never thinking about moving elsewhere, today was the day we started considering it, purely because of the level of taxes vs what we get back.

Because yes, other countries have high taxes, but 1) the lower tranche pays more taxes than here and 2) public services are better, medical sector for ex.
In here it feels like anybody on 150k+ is seen as only good enough to pay for everybody else, not receive anything in return and shut up about it.

So my neighbour was asking me about this for his mother who needs to go into a care home. House worth £850k, she has investments of £200k. He has POA over finances and will inherit on her death. If she died tomorrow he’d have to pay £20k stamp duty (£1,050,000 less £1m nil rate band x 40%). If she died tomorrow and had sold her house the IHT would be £160k (£1,050,000 less £650,000 x 40%). So the choice for her care fees are to sell and use her money to pay the fees, or use what money she has to pay the fees then fund it himself. It’s a no brainer for him to do the latter.

Re your second paragraph re local tax
The article states the proposal is for two taxes
Local council and central Government ( added together for the yearly payout)
If we go by one amount as you say most people’s council tax will go down and the Govn will lose the stamp duty money too.

They want to increase money coming in not lose it.
The only increase on your suggestion would be taxing landlords on student lets which are currently exempt from council tax and of course single households.
of note I would see a disaster for students as rents would just rise

Perhaps as this is doing the rounds we might get more info soon on what’s being leaked

Any tax that potentially forces people out of their houses is immoral. It’s one thing to take on a known tax burden when you are purchasing a property but quite another to put a huge tax burden on someone who has resided in a property for decades and planned to stay there. Imagine being responsible for forcing tens if not hundreds of thousands of people out of their homes. All clambering for cheaper properties that no longer exist.

Oh I see.

That sort of explains where the money would come from (and I note that it won't apply to people who have already paid stamp duty) - but only if you make a profit on sale.

I feel it could become quite complicated.

Have you taken into account people may have started in a 2 bed terrace and worked their way up using equity? it does not mean they are wealthy and 500k does not buy much these days. You seem to be focused on first time buyers with your facts and figures. As for my original comment I was trying to say those are house prices near me which is not a particularly affluent area

I don’t think many would consider a family with a mortgage on a home worth 500k “wealthy” 🤷‍♀️
Im in the NW.