Reeves plan to tax houses over 500k PART TWO

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I am not the OP from the OP!

Exactly
The Government doesnt pick and chose who pays tax on other purchases
You buy something there’s a tax to pay
If not everyone pays then others have to pick up the tab
Again!

I really don’t want to be argumentative but everything you said in the paragraph I quoted is equally applicable to Stamp Duty.

But it will take many many decades to be cost neutral and this is why it's worse. The government will suddenly lose out on all the stamp duty that would have been paid on houses under £500k. They will also lose out on a large percentage of the stamp duty that would have been paid by those houses over £500k. How do we fund this shortfall? You do realise that any increase to National Debt will lead to ever higher interest payments so it's something that needs to be factored into the whole equation.

It's also worse because it ultimately is relying on the few to fund the many. We know how these policies work and yet Labour keep pretending they will miraculously work here. Look at the non dom tax. We have to accept that ordinary people need to pay taxes like stamp duty.

Incidentally I see a number of property professionals are supportive of the measure and suggest it will get the market moving and ultimately lead to price increases lower down the market as stamp duty isn't an issue anymore. Is that really what people want? The money goes to the vendor instead of the government and ultimately inflated the market further.

This new system would appear to bring in precisely zero extra money which one would think would be the whole point of the exercise.

i think they’re actually looking at annual property taxes. The thing is in other countries you get tax relief on property maintenance - even interior decorating. You can’t just land homeowners with £££ without some incentive to keep the home in good order.

But it's not applicable to the same extent. Nobody is saying that the purchase of a more expensive home shouldn't bring about a larger tax bill than that of a cheaper home. That's the current system. The new tax though would create a threshold where it was effectively tax free to buy or sell a property below £500k and could get very very pricey to buy an expensive home above this threshold.

It's so depressing as property taxes already high in the UK

https://taxfoundation.org/data/all/eu/real-property-taxes-europe/

This cash cow has already been milked and yet they come for more.

Agree
An awful lot of our housing stock would be unaffordable to live in
Can we really abandon so many older and historic buildings many of which also require high maintenance.

If these older expensive houses had to reduce their sale price to sell, can those buyers afford the extortionate costs of maintenance and running costs - not many I think.

I doubt RR would even concider this serious problem

Thanks for that
So our property taxes are already by far the highest in Europe!

Yes I’d rather pay stamp duty. They’ve already increased it

in the SE modest houses are well over 500K

Covid and Brexit

Not really though, at least in part we grew the money through doing up really run down properties, we added extra value.

And I have no issue with paying tax which is spent wisely. My issue is with being told that people who own a home over 500k 'just have to take it' and are 'up to their eyeballs in property' with our 1 3 bedroom house 😂

Currently properties under £125k do not pay stamp duty. So no. Everybody does not pay it. All that is changing in that regard is that the threshold is getting higher.

I agree
Pay it and move on. We never know what our future holds and I wouldn’t want another yearly bill to worry about.

I think it is worth remembering here that this is not Labour policy. This has been suggested by a think tank and Labour are considering it. I think this thread is full of people hating on the idea because they think it has come from Labour.

Nothing where we live is under this threshold, perhaps 20:years’ ago

Not on purchases but council tax is based on property, current stamp duty is based on property, income tax is based on income, inheritance tax only applies after a certain amount. Pretty much any tax outside of VAT is bbased on property or income.

In my county there are 554 properties on Rightmove under that value. In my Mum's there are 1,570 and in my Dad's 5,065.

It's hardly a tweak to the threshold. The percentage difference between houses worth less than £125k and those worth £500k is massive.

It means the vast majority of people currently pay stamp duty whereas a minority of people will pay the new property tax.

I work in tax and do a lot of research into these sorts of policies. Anything with any sort of threshold introduces ways of getting out of the tax. Anything that taxes transactions prevents transactions. It’s so daft to only introduce the tax over a certain threshold.

Whet will happen if this tax is introduced? People in houses over £500k won’t move. There will be a glut of houses for £499,999. It’s so obvious. Why do this?

I just don't buy this proposal or think it is workable in terms of raising more tax. Cornwall has the highest rate of council tax in the UK, at 5.5%, despite being a low wage/income county. I already pay £3900 pa in council tax for a (very nice 4-bed) home and we have lived here so long we have never paid stamp duty either, because it didn't exist when we last bought a house. We are planning to move because we're fed up with the M5 traffic jams in summer. But I don't hate where we are so if the rule change is significantly bad news for us, then I probably won't bother with the move at all, and HMRC will get nothing at all.

I work in tax and do a lot of research into these sorts of policies. Anything with any sort of threshold introduces ways of getting out of the tax. Anything that taxes transactions prevents transactions. It’s so daft to only introduce the tax over a certain threshold.
Whet will happen if this tax is introduced? People in houses over £500k won’t move. There will be a glut of houses for £499,999. It’s so obvious. Why do this?

I could see house builders selling the basic shell of the house for £499 (a bit like a Ryanair flight) and then everything else would be added on (cooker, toilet, radiators etc) so that they are not included in the basic house price

I think people hate the idea because Labour is proposing to implement it. We don’t give a shit where it came from.

There is a move to widen the tax base. It is coming for everyone, regardless if people have been in their houses for 50 years or are buying next year, mortgage free or in debt to their eyeballs. They will start by picking on newly bought properties first, then it will widen to include everyone.

They will start by picking on newly bought properties first, then it will widen to include everyone.

Well, everyone who works and pays taxes, that is.

The one I saw was higher rate taxpayer and property over 500k. That’s 120k people

but then the threshold will change to everyone and the amount will change

and why the higher rate tax payer? Don’t they realise HNWI manage their finances so they’re not!!