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.

My house would be caught

I think its a good thing

Do you think anyone in a house that is not new will move if this policy is introduced? Not unless they have to

But people aren't moving much now. Stamp duty makes moving prohibitively expensive & it's why so many FTBs who are older are skipping the flat stage. I also think we have reached an affordability issue in some markets. I'm definitely not advocating for stamp duty & well as a selling duty.

A policy, which l personally don’t agree with by the way, has affected you, so your attitude is, you hope everyone else is affected in some other way.
Again your comments are coming across as spiteful.
Who are these people who found delight, in this policy, aren’t you just tarring everyone with the same brush.

Absolutely this, my parents are pushing 90 nearly, my dad is still incredibly active in the garden and his workshop, thats his hobby. They have friends and resources nearby, it would probably plunge them into depression to move and theres nothing they coujld move to to meet their needs, in the area for much cheaper than they have now.

Most sensible comment on this thread.

Could also include- heavily tax 2nd home owners, ban BTL mortgages and ban Air BNB.

No one needs a second home and there are families living in caravans in the Welsh town I come from while second homes stand empty for the rest of the year.

If this happens to we would seriously consider relocating to another country. It’s the final nail.

It's starting to sound like the plan is to tax both buyer and seller. That is the seller pays on the difference between the price they paid for the house and the price achieved, and then pays SDLP on the house they are purchasing. No thanks mate. I just won't move.

If the tax is on a house valued at £500k that covers two extremes. Take my aunt, has lived in her property for years. Bought it for not a lot, now wirth over £500k. She’d pay the tax but she’s a boomer with a final salary DB scheme and no mortgage. Loaded. Compare to my brother, pulled together every last penny to get a house big enough for each of their 3 kids to have a room. Paid £524k last year. Similar house prices, totally different affordability.

A 500k house in my area is in semi-detached territory, it's not the huge WAG house people seem to think it is...

It’s not even in consultation stage so it’s difficult to speculate on any proposal at the moment. But the concept has been misrepresented by much of the media.

The idea is partly based on this report, which I recommend reading if you’re interested: https://ukonward.com/reports/a-fairer-property-tax/
See page 14 onwards in particular.

In summary, though, it’s a possible replacement for council tax and stamp duty. It involves an annual levy on all homes to replace council tax (though that will be time consuming and legally complex to implement) and an annual national tax - with payment deferred until the house is sold - on property worth above £500k to replace stamp duty. It essentially shifts the tax currently payable as stamp duty from buyers to sellers. Interestingly, this report proposes not charging it until the next sale of the house - so that if people have recently paid stamp duty they wouldn’t effectively be paying twice.

There would be a lot of detail to discuss and iron out before anything like such a major reform is proposed as policy, so it really is premature even to speculate on how it might be implemented at present. There are issues that I can see (eg what if we start ending up with negative equity again so people are unable to pay when they sell). But it’s an interesting idea at least, and may in some ways end up being fairer than our current systems.

It isn’t simply an additional tax on higher value homes - it’s a potential overhaul of the way we tax property wealth already.

@Letgoofmyblank that's the issue though, the huge intergenerational inequality. It's a fucking disaster and no idea how you fix it.

It isn’t simply an additional tax on higher value homes - it’s a potential overhaul of the way we tax property wealth already.

it's definitely something that needs to be looked at

Agreed. My parents are loaded, I’ll be ok. But what have I done to deserve a massive leg up?

Oh well that’s me never downsizing then. I’ll stay put. Not sure that’s her plan though. Grabbing cow!

Funny how the harder you work the more ‘privileged’ you become.

all those people on here who cheered on Labour for adding VAT to private school fees - not so fun now it’s you is it?

I agree with this. Lots of people were in favour of increased taxes when it didn’t affect them. They’re not quite so keen on paying more tax themselves though. What these people don’t realise is that taxing a very small percentage of the population will never raise much money. In order to raise a meaningful amount, there needs to be higher tax on a larger number of people (eg 1p on the basic rate of income tax). I’m afraid I have zero sympathy for anyone who voted Labour and is now saying “oh well I didn’t realise the spending cuts and tax rises would affect me; I’ll never vote for them again”.

Why not just add it into council tax and call it a land value tax? Simpler. And how would you compensate those like a prior poster who’ve just spent £30k on stamp duty?

I wonder if all the people saying "what's the point of working if I have to pay tax on my house" would have sympathy with younger people refusing to work because a huge chunk of their money goes to a landlord?

If you increase property taxes you lower property values.

In theory that is a good idea.

Unfortunately a lot of lending is secured on our existing high property values (including the taxpayer backed Mortgage Guarantee scheme for 95% LTV mortgages).

This is one of the reasons Governments of all colours try to prop up the housing market. The alternatives is losses for our banks and building societies

RR knows all of this. This seems like a distraction from whatever tax comes next.

But this proposal would both help them and encourage them to downsize. If it replaces CT then it would free up £2-3k of cash a year for them, because the new tax can be deferred. No stamp duty would make downsizing cheaper. And by living in a big house they would be incurring a very large annual tax (even though it’s deferred until sale) which they could mostly avoid by moving to a smaller more suitable house.

The tax is annual, but only paid when the house is sold. It’s not like stamp duty which is only incurred at point of sale. The longer you stay in the big house the larger your bill will be.

Well you either pay money to a landlord or you pay huge amounts of interest to a bank over 25 years for the privilege of being in debt to them for all that time, thats a ridiculous comparison

Reeves won't last.

Labour will NOT be voted in again.

What about immigration, what’s your views on that?
The government aren’t addressing this, it’s just far easier to blame people who are low incomes and the disabled.

I'll still move. We need to, teens sharing bedrooms unhappily. I'll pay the sales tax (but not stamp duty). I'm happy to pay tax, it's needed.
We can't keep complaining about the state of the country and not expect to pay.

My house is probably worth over £500k but it's not "unearned". I bought the house for £280 and since then I've spent money on kitchen, bathroom, loo, garage door, windows, garden pod, driveway.

Plus mortgage interest. I suspect it's more than the gain.

If residential homes were subject to capital gains tax, I don't think people would pay very much.