Reeves plan to tax houses over 500k PART TWO

[soupyspoon]

I am not the OP from the OP!

Something has to be done in this country re housing. I bought a house in 2004 for 105k which was 5 years old (owners bought is new build for 40k). I made a 40k equity but then went into negative equality in the crash. Bought again and now in my forever home (I think).

Maybe I have a different viewpoint as I grew up on benefits in the 80s and in foster homes. Housing should be a right, not an accumulated wealth.

I still live in a deprived area but in an area of mixed economics. People are more than welcome to move to our region but I don’t think they will. Even my headteacher (who was taught at the school I teach at) lives 39 miles away.

Some people may be trapped by where the live but there are also people who choose to live in a certain postcode. I teach where I live so I know my job is harder than that if a teacher in a leafy suburb. Swings and roundabouts.

I actually think it would be great if stamp duty or its replacement took account of the buyer's capital/equity, rather than sale price. That way you stand more chance of taxing wealth gained from the property market.

It’s the same as buying a car in cash compared to monthly leasing.

Not if you get a very low interest rate. Spending your cash on a depreciating asset and simultaneously losing the interest on that cash isn’t particularly financially astute.

It was in the paper that was linked. I’ll attach it again.

How much is your house worth out of interest? Your parents house? Your brother or sisters house? Your aunts house? Your children’s future house? Even if your house is under the threshold you are saddling other people with this debt and seem weirdly pleased about it.

That’s a bonkers statement. Do you understand how much inflation has added to people’s monthly outgoings? Electricity going up. Water bills going up. Food costs up 4.9% and you honestly think people aren’t going to notice another £540 a year disappearing through their hands. Costs are increasing year on year. This country is becoming very expensive to live in and now they are talking about another large yearly bill and you think it’s nothing. Your finances must be in VERY good shape.

@BIossomtoes houses will be depreciating assets. Many houses have not actually increased in price over the last 20 years in real terms. The next 2 decades, there will definitely not be an increase in price in real terms, so houses will most definitely be a depreciating asset moving forwards. There are no winners in the current market conditions. Everybody will need to pay more in some way or other, with the wealthiest paying proportionally more it seems with Labour.

I'm not "weirdly pleased" about anything.

Either we face up to the fact that better services=more tax or we don't.

Either we face up to the fact that high house prices are ruining the economy or we don't.

If there is anything I am pleased about it is the focus is finally coming onto housing wealth, and that there is an opportunity to raise tax there.

I don't consider wanting better services and lower living costs for everyone as "weird".

I suppose some people might consider people who want to preserve their own housing wealth at the expense of good services and the ability for everyone in the country to be able to afford their own home as "selfish".

If there is any consolation for people who are not in favour of increased taxation on housing, for years successive governments have talked about doing stuff like this, and all of them have bottled it.

Labour seem to be gaining a reputation for talking a good game but actually pulling out when the chips are down. So I'm not holding my breath they will actually do anything like this - we can but hope.

I don’t want more services but I do want better services. However I don’t think throwing money at them makes a difference

the world has changed a lot in the last 20 years but most public services haven’t or have spent stupid amounts of money trying

If you can buy a £600k house you either have a lot of equity or a very good income. Only 20% of homes are over £500k so it surely does indicate a degree of wealth.

More money would make a huge difference. Austerity stripped them to the bone. Public services were as different as the world 20 years ago.

Because it's essentially punishing people for daring to own a house worth a certain value. The underlying assumption is that people that 'own' houses worth £500k are somehow inherently wealthier than those that own a house worth £499k when we knowthis isn't the case. It ignores regional variance, needs of family units and those that aren't geographically mobile. It is designed to disproportionately certain areas and regions.

All that equally applies to Stamp Duty.

Yet here it states government spending has increased each year for last 15 years

https://www.statista.com/statistics/298465/government-spending-uk/

Stamp duty is about the properties value though
It’s in itself not a wealth tax and to tax the way you are suggesting just means sellers will be savvy with their borrowing
It would be expensive to run aswell

The difference with stamp duty is that it is a known amount and if you borrow to pay it you know how that will cost you annually etc

once the property tax has been introduced and the principle established you then have uncertainty over the amount as you don’t know if a government will come in and ramp it up etc. perhaps I just distrust governments when it comes to tax rates

So austerity was pointless then? Where’s all the money gone? And I notice that’s not real terms, it takes no account of inflation.

The difference is in good times you can pay off more on your mortgage and eventually pay it off
A yearly tax instead of stamp never gets paid off. It’s just a lifetime tax

Here
My data is from gov.uk

I don’t care if it’s from God, it doesn’t take into account inflation.

This is in real terms according to IFS
https://ifs.org.uk/total-uk-public-spending

IFS states austerity = kept spending flat rather than reduced it

This is a key issue
Governments will keep ramping it up which is why it’s common sense to distrust Governments when it comes to tax or anything really

We don’t have a 600k house. We don’t have a lot of equity l, but we do live in an expensive area of the country due to my partners niche job. So we are nicely suckered.

Did you look at that before you posted it? £10 in 2010 is worth £15.54 now. All the figures need to be adjusted to make them meaningful.

No, it doesn't apply equally because under the current stamp duty system everyone pays something. If the government want the policy to be cost neutral and to not apply to the majority of house purchases then it doesn't take a rocket scientist to work out that those that do pay the new tax will have to make up the shortfall. I don't understand why people don't understand this.