Anyone else in the South East worried about Andy Burnham bringing in a land tax?

[Beachbooks]

With it looking likely that Andy Burnhan will be the next PM, I was interested to see if anyone else in London / the south east were worried about potential tax raises specifically around the land tax rather than stamp duty ?

A lot of my friends who live locally are worrying that he will make the land tax for the South East so high in proportion to other areas of the UK that it will be financially very difficult to afford but then also extremely difficult to sell!!

BTW we have very standard house and garden but we live in an expensive area

One aspect I don’t fully understand is how it works with tenants. I can see it’s fair for poor tenants who struggle to pay rent that they should pay no council tax and the landlord pays the 0.96% per year for the rental property in addition to income tax? ( I think that’s right 0.48% for your own property and twice that for second properties.)
But my experience when I lived in London was that not all tenants are struggling, there were loads of very expensive rentals for City workers with rents of £5k per month plus including corporate people on secondment etc. I guess if landlords can afford to rent out those properties then they can afford the 0.96% or will just pass the lvt on to tenants?

My instinctive feeling is that estate agents would do well out of both abolishing stamp duty and increased rents?

I live in the north in an expensive area and i have to pay all this and 4k in council tax!! Why shouldnt you if i do?

The point is that some people in other areas are being manipulated into believing that everyone in London and the South East pays a lot less council tax than them. That is bollocks. Furthermore, many people in those areas are going to end up paying even more if Burnham brings in this policy. I am sick of the divisive rhetoric being spouted by the current Government. A Government should be bringing people together, not dividing them!

The point is that some people in other areas are being manipulated into believing that everyone in London and the South East pays a lot less council tax than them.

There’s no manipulation necessary. The highest Band D in London is £2050. Band D where I live is £2531.

https://taxbandcheck.co.uk/regions/london

UK and foreign investors have a fiduciary duty to maximise returns. That does not play well with social or affordable housing.

Beyond the construction phase, a proportion of the long-term income generated by housing development with private/ instructional investors is likely to flow to overseas through complex structures rather than remaining within the UK economy. That means less capital circulating within the regions / UK, effectively limiting the wider economic benefits that would have come from that money being spent, reinvested and taxed in the UK.

So it's great that Labour have such an ambitious housing target, but they can't afford to build it without help. Their choices are expensive debt, if they can get it, or investors whose primary concern is maximising returns.

Rock and a hard place springs to mind.

Many people bought derelict houses and spent years renovating them. Others simply bought a house in an area that wasn't desirable. Those homes may now be worth significantly more on paper, but the salaries and disposable incomes of the owners are often nowhere near the value of the property.

They are not speculating, nor do they own more than one home. Why should they be forced to sell their home, or take on debt to the government, simply because the value of the home they live in has increased?

How is it fair or reasonable to expect someone to fund public spending from an unrealised gain from the roof over their head?

House prices are high largely because of decades of policy, planning and a failure to build houses, not because Person A has lived in a house for 30 years or Person B has renovated one. If governments have contributed to creating the conditions that pushed up property values. Why should pensioners and PAYE workers on ordinary salaries, who happen to own homes that have become expensive over time or have large gardens, be expected to pick up the tab for those failings?

Why should someone - like me - not pay tax on an asset that has quadrupled in value since it was purchased? It’s the reason it’s so annoying when people witter on about IHT being on money that’s already been taxed. The bulk of most people’s estate is their house, the profits on which have never been taxed.

But you’ve paid your stamp when you bought
You won’t be charged twice
This policy doesn’t relate to you unless you move and buy after it has come in

so what about introducing CGT on inherited properties but abolishing IHT? would you be up for it?

What difference would it make? Tax is tax whatever name you give it.

A band D where I am in Essex is £2423.92. A band D where I used to live in Leeds is £2,271.51. And you said you were in the South so you are already paying more than the Northern city I have given as an example. Plus it’s perfectly possible to find a decent 3 bed semi in band C in Leeds whereas that will be D or E where I live. Meaning bigger mortgage and more council tax.

Council tax is still lower in London. 🤷‍♀️

I don't have an issue with a reasonable tax on the profit when I sell my house. At that point, the gain has been realised and I have actually received and have the money to pay. I do have an issue with being taxed before that point and especially when the land / home is being treated as pure profit.

There is an inconsistency when the years you have paid rent can be taken into account when buying your council home, but are considered inconsequential when it comes to charging you a tax on your home. That is before we even get onto it being a tax based on a theoretical value, where the value exists only on paper and the owner may not have the disposable income to pay the tax.

The real issue is that the only sustainable solution is to build more homes, especially affordable and social housing, while limiting the purchase of residential properties for investment purposes. Taxing homeowners on unrealised increases in property values does nothing to address the underlying shortage of housing. It is also fundamentally unfair. Yes, some people have housing insecurity or cannot afford to buy, but destabilising existing homeowners is just adding more instability and moving pressure around the market, not fixing the problems.

Scrap my previous comment
it seems Burnhams will not take into account those who havd already paid Stamp

I feel for those trying to sell atm and for those who’ve paid masses in Stamp.

I won’t be looking to sell now until we see if this is introduced.

Seriously?

So you don't see a difference between CGT on inherited residence and IHT on the entire estate?
Do you actually understand what you support?

And why does that justify me and other people paying more tax when we’re already paying the same as or more than people in the North? Because that is what’s going to happen. You’ve already admitted that your house has increased four times in value. That means your mortgage must be much lower than many people have now. I really don’t understand your frothing about people paying less council tax than you when many of them are paying huge amounts out in rent or mortgage.

This poster just supports tax. Any tax, the more the better, on everything and anything and anyone. Without much understanding of what the tax is and its consequences. Read the above about IHG and CGT.

Are you the poster usually attacking her on maths skills?

This poster does nothing of the sort. I’ve been paying tax for 54 years and will continue to do so until I die. You asked if I would prefer taxation on a deceased estate to be IHT or CGT - frankly I don’t care because I’ll be dead, why would I prefer one over the other? My understanding of taxation is probably better than yours.

No, that’s another one.

Yes while she is sitting there in a house that has gone up massively in value meaning she paid little or no stamp duty. But she wants people who have already paid much bigger amounts of stamp duty to pay even more tax. Plus she has admitted that she would be better off under this policy.

Yes while she is sitting there in a house that has gone up massively in value meaning she paid little or no stamp duty. But she wants people who have already paid much bigger amounts of stamp duty to pay even more tax. Plus she has admitted that she would be better off under this policy.

Yes while she is sitting there in a house that has gone up massively in value meaning she paid little or no stamp duty. But she wants people who have already paid much bigger amounts of stamp duty to pay even more tax. Plus she has admitted that she would be better off under this policy.

Sorry, didn’t mean to post three times. Having a problem with Mumsnet on my phone at the moment!

You didn’t need to say it three times. Obviously I paid stamp duty. I said marginally better off, not enough to notice.