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.

This is the nutty bit. There are loads of pensioners in too big houses they can't afford to heat. They are already scared about inheritance tax so they don't sell. Now they might also be hit with a 500k tax, so again, they won't sell.

Well done Labour. Further trapping loads of pensioners in homes they can't afford to heat or maintain. All while there is a housing shortage. Slow clap.

@Scarylett I live in a house in SW London, I paid more than 500k for my house...I also plan to move again in the next few years. I'm not sure why you think me recognising that we need to do something about housing costs means I can't be impacted?

It was a general comment in response to someone saying it would be a penalty on people to live in certain areas. Well theoretically, I dont think that is out of the question. Not specific to Londoners but I started talking about London as an example

Theres plenty of places in the south east where a new tax like this would affect the majority of the town.

This will kill the property market in the South East, people will look to extend existing house or move to cheaper locations.

Reading the article, it doesn’t seem like a terrible idea?

I’d assume most people able to purchase a £500k+ house would be in work.

I assume it would impact downsizers too. And a property tax would be paid by everyone surely?

Property tax in USA but no stamp duty and lower income tax …

i think people should refuse to pay this new tax if it comes in. Like poll tax.

I can’t afford to pay tax on top of my London mortgage for a shoebox of a place so Reeves can f*ck off. I will never vote Labour again if they do this.

Does sound like the worst idea I’ve heard yet

I'm in the SE and hoping to move house soon. I think it's a great idea. Replacing stamp duty with a tax with a higher threshold and the tax being payed by the vendor seems sensible to me. Around here the majority of homes on the market are new builds, so the developers will either have to pay the tax or lower the price of properties, and no stamp duty for the buyer (unless a second home - in which case I have no sympathy for them).

Would it apply to people selling their homes because they've lost jobs etc and can't afford the mortgage etc?

Currently there is a lack of social housing, so councils pay private landlords to house people. This drives up demand for private labdlords who put rent up accordingly. They’re making megabucks. It’s great. If the demand was there they’d get less for their rentals, might not cover mortgage payments, may sell up, flood the market, reduce house prices or at least would be able to charge less rent to private renters. More housing of any and all variety is good though.

Ah, OK. I wouldn’t have expected you to 😅

My point was that Scotland already pays higher stamp duty, so it is proven that people will pay it. If I had intimate knowledge of the equivalent in Jersey or even Norway, I might have used that as an example, but wouldn’t have expected you to reference it in advance.

@FridayFeelingmidweek how would you persuade pensioners to downsize? I have family members who moan about the cost of downsizing & stamp duty. They are being ridiculous though, they have hundreds of thousands of pounds of equity.

It would be fairer if it was like a capital gains tax so only taxed on a proportion of profit over X amount, not on total value. Still would discourage downsizing.

She can't afford to pay for as much other stuff as more of her income is spent paying for her house. Hence a smaller economy.

My council is spending so much money on private companies that are doing a poor job with road maintenance. It’s a complete waste of council tax!

Bring the service back in-house—there were no problems before. Re-nationalise it.

She should look into this corrupt practice going on in councils to actually save money.

Most homes changing hands at that value are actually pretty modest homes, just in an area in higher demand and the owners are just ordinary people with ordinary income.

Do you think anyone in a house that is not new will move if this policy is introduced? Not unless they have to. Fewer houses on the market means those on the market can command a higher price and guess what, your new build has just rocketed in price, which is great for the developer who punts the new tax onto the buyer.

Yes that's true - but who is appealing saying my band is too low? And bands can't be reviewed until a property is sold again. Not a bad saving over 20 years....

If the tax doesn’t apply to people who’ve already paid stamp duty then fine. Otherwise it’s disgusting to tax us 3x ( income tax + stamp on the money I already paid income tax on plus property tax).

My take on the downsizing issue is… actually most pensioners have no interest in downsizing and are happy staying put unless they genuinely cannot cope.

Smaller properties aren’t typically much cheaper, often are too small / have no gardens / unattractive leaseholds - and people want to stay in the communities they know.

They’ll often have lived there for 40 years or more - moving is about a lot more than the money!

What she did was to completely sidestep the issue with PIP. She introduced an arbitrary change to eligibility which will affect genuinely and significantly disabled claimants. And it won’t save a penny because successive governments haven’t learned that just because you stop supporting a need, that need doesn’t disappear.

By making it significantly harder for genuine claimants to qualify for PIP, large numbers will lose their entitlement, and with it the carers allowance, that together with PIP allowed them to address their care needs far more cheaply than relying on the already broken care system. The people who lose PIP will still need care, but will now be forced to seek it through local authority provision, which is far more expensive. It’s an own goal and the reason her own party scuppered it was because MP’s actually listened to what their constituents were telling them and acted on it. Isn’t that what they’re supposed to do ? Or is that only when it suits the narrative.

The root and branch reform of PIP that was promised before the election has mysteriously disappeared and the consultation put out to disabled people considerably watered down, despite this being what is needed to actually bring costs down. Make the assessment fairer and more transparent, so that claimants don’t have to resort to massively expensive tribunals to get a fair decision.

This often gets mooted on these types of thread but despite asking for evidence of how a mass sell up of private rental properties would result in a crash in house prices I never get any evidence

Private landlords at the moment have queues of people for their properties, they would still have demand, some people who have a choice might not want a social housing contract, people that plan to move around a lot might prefer a private rental, it wont kill the PRS at all.

Stamp duty at 125k is a joke. What can you buy for that? Go after companies not paying the correct amount of taxes.

Because in a civilised society those who have more support those who have less?
Paying higher tax comes from being privileged. The people who can't afford are often living in over-priced private rentals, those if us who own property over 500k should certainly be paying.