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.

That's because they use their wealth & power to protect and further their wealth so that they are untouchable.

Not sure that's how numbers work . . . . You don't make another house available when you move, because you take one when you move into the new one. The amount available is identical either way.

Much as like some of her policies and dislike other policies I find the whole ‘Rachel from Accounts’ thing deeply misogynistic. This is a site which ought to respect women.

Agree, it's so fucking rude.

How about taxing Amazon, Facebook and everyone else who shelters or funnels money off shore?

Government chases home owners as a house is impossible to hide.

God forbid they start with taxing actual wealth, as in billionaire and multi-millionaires, as well as taxing passive income / capital gains at a higher tax rate first.

Way to lose the middle class....

I already made that point earlier in the thread

But its a ridiculous comparison to say that someone would refuse to work based on paying their rent to a landlord because someone who is pissed off at the potential new tax wonders to themselves 'whats the point in working'.

You pay someone, somewhere. We all do. Nothing indifferent about it at all.

Never thought I would ever say this, but I hate them too.

Why would you compensate people? They've paid the tax due under the current system. Stamp duty isn't a surprise to anyone. When they buy their next house, that will be potentially subject to the new, but also known, tax.

You also can't add a land value tax to the council tax system. It isn't based on land values. You could, in theory, replace council tax with a land value tax, and I'd be supportive of that, but you can't do it quickly enough. Similarly, you could revalue all our houses to revamp Council Tax bands, but you can't do that quickly enough either.

I’m fairly sure that Labour won’t introduce any changes which reduce the overall tax take.

Yes, but HOW to bring that about??

as someone who has paid over £300,000 for rent over my adult life. I’d have paid off my first rented house by now for that amount.
the house hasn’t got bigger, but the cost has doubled.
I will have to continue paying that until I die, mortgaged owners don’t have that worry. so I will pay out at least that again, probably much more as rent rises.

they don’t live with the bank asking them to leave, pass all the checks, find the money for deposit boxes etc and move with 8 weeks notice.
they’ve been able to paint a child’s bedroom. Have pets. Plant bulbs in the garden and see them grow. Let the kids use paints in the house without fear they might get it on the carpet and lose their deposit.

Life as a renter is hard, relentless and seeps into every single decision you make.

How does it? The seller is presumably moving somewhere arent they? Or are they just going to live in a tent somewhere.

Well they tried - that’s what the digital services tax was supposed to do. Trump made clear that there would be no US/UK trade deal if it was introduced. Tens of thousands of UK car workers, among others, would have lost their jobs - we export a lot of Range Rovers to the US. So they scrapped it.

Taxing American tech companies more is no longer a viable option. RR knows this very well.

@AlastheDaffodils , I suspect the plan will be to impose tax on both buyer and seller, as well as an annual % charge on values. Which, like the increase in CGT, will mean that I probably won't bother to move. I like my house now as much as the day we bought it, but I would quite like to move closer to my sister and out of the tourist environment that's evolved.

Increasingly for the next few years they’ll be dead.

This appeals to me! Our annual payment would go down to £1,500. How would you calculate the property price though? I thought the problem with Council Tax was that it would be a massive ball ache to update the outdated rateable values?

I'm unclear how taxing people who own homes worth more than 500k will crack down on ultra wealthy tax avoiders?

Also wealthy people pay vast amounts of tax already. You are just ignorant of the statistics.

There are two very different policies mentioned in that article.

One is an overhaul of council tax so that it is more proportional, ie everyone pays a percentage of the value of the house (up to £500k) with a minimum of £800. Where I live, the council tax for a Band A property is currently £1,166.

It will need some sorting out but it seems fairer than the current system.

The other policy of replacing stamp duty seems odd but that may work as well.

As far as I understand it (please let me know if I'm wrong). Under the new system, if somebody buys a house for more than £500k then they will not pay any stamp duty but they will then have to pay an annual charge (and a bigger one if the cost if over £1 million). Houses under £500k are not subject to this charge and will be free of stamp duty.

From the paper, they are suggesting that if you buy a £600k house then you do not have to pay any stamp duty (which would currently be £20k in England & Wales) but instead you would pay an annual charge of approx £540 per year. This is in addition to the replacement council tax.

Or, if you buy a £1 million house then, instead of paying stamp duty of £43,750 you pay £2,700 per year.

But is it not talking about replacing stamp duty? Which already charges you a higher chunk of money for buying a £500k plus house? Not sure why everyone thinks this is so terrible, at least until we see the details of the implementation- it could actually work out cheaper for many people. Where I live I ended up paying the best part of £25k in stamp duty on a £350k house (not a second home), I imagine on a £500k+ house it would be more like £30-35k. So I can't see this necessarily working out worse for most people- but do recognise it will disproportionately affect those in SE England. Nothing to stop you moving elsewhere though where your money goes much further - which may also be a positive in bringing house prices down, if people don't want to spend over £X due to the high rates of tax. Agree on it potentially encouraging older people to just sit on their wealth though, so you'd also have to ensure the council tax replacement or something else tackled that.

The housing market is such a huge financial piece of the UK economy, they would not do anything that would cause price drops - hence all the relaxation of lending, help to buy, mortgage guarantees for banks etc etc.

Ever increasing prices are the economy. It's reductive.

We know all the services are on their knees.
everything needs money and more of it

I’m not being goady. But where is it going to come from?

Really, how do you work that out. People with properties worth over 500k are all going to die?

How about taxing Amazon, Facebook and everyone else who shelters or funnels money off shore?

key is offshore! You need global initiatives to target global wealth.

God forbid they start with taxing actual wealth, as in billionaire and multi-millionaires, as well as taxing passive income / capital gains at a higher tax rate first.

they have targeted non doms

I think they mean it won’t be a choice to move. The only people moving will be probate moves because it’s too expensive