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

@suburburbanabsolutely & I haven’t said otherwise. I moved in 22 and paid 27k
ish stamp duty.

If you look back on my posts you’ll see it doesn't just apply to London

I agree
Stamp should go

Two things are needed imo
A better model to re evaluate Council tax, not the Fairer one
Stamp costs distributed over a longer period if the remodelling of council tax doesn’t bring in enough

Skynews now:
Council tax overhaul may be on cards as debt hits record high | Money blog | Money News | Sky News

"Council tax debt has reached a record high in England, government data shows.
A total of £7.4bn is owed in council tax, an increase of 11.3% on last year's figure of £6.6bn.
Almost six million people are worried about affording their monthly payments, debt charity StepChange found. "

"The likely next prime minister, Andy Burnham, has long been an advocate of council tax reform.

During his recent campaign, the 56-year-old called it "highly regressive" and said its 1991-based valuations were "not justifiable".

Burnham is listed as a supporter of a proposal put forward by the campaign group Fairer Share, which wants to replace council tax and stamp duty with an annual property tax that's equivalent to 0.48% of a home's value.

Martin Rayner, financial adviser at Compton Financial Services, told Money: "The council tax debate is particularly worrying. Council tax was designed to fund local services, with bands based on relative property values within a local area.
"It was never intended to mean that two homes worth the same amount in different parts of the country should automatically pay the same tax."
"

Some new owners in certain areas perhaps
but I don't know the figures on those who’ve lived there
more than 5,10,20 years etc

@BrownTroutBluesAgainapologies. Is it for everywhere? I think it should be.

We need to change the current system as it isn’t working & I hope to move again. I really would rather not pay another 40k plus in stamp duty in one hit.

And I definitely agree if you have paid stamp duty within a specific timeframe that you should have some exemptions. Otherwise the market will grind to a halt until the proposal comes in surely?

@BrownTroutBluesAgain that’s the complicated bit although many of those who bought years ago will have paid far less than recent buyers in stamp duty terms and will have far more equity. I find it interesting that this proposal is considered completely unfair but ridiculous stamp duty costs aren’t.

1 in 39 homes across England will get a hike. That’s not a small increase in £££ either if you look at my calcs a few pages back

heres the numbers
of just those over £1mill now

London: ~340,600 homes (about 1 in 11 properties)
South East: ~151,600 homes (about 1 in 28 properties)
East of England: ~58,400 homes
South West: ~40,700 homes
West Midlands: ~21,600 homes
North West: ~20,400 homes
Yorkshire and The Humber: ~11,900 homes
East Midlands: ~9,100 homes
North East: ~2,700 homes

Turning the usual thought process around
one could say why should a family in a country house in the Midlands pay the same in yearly tax as a 2bed flat in outer London.

It wouldn’t only apply to London but how do you want to determine what the annual tax should be?

it's "I think", and "I don't believe".
Not supported by numbers or surveys at all.
And the fact you don't believe it doesn't make it sensible approach.

Let's look at numbers.
London very average family house, 1m.
SDLT 94k + about 2.5k council tax pa.

Under new rules no SDLT and CT but 4.8k property tax.

Ignoring inflation (and house prices inflation at a higher end of the market will go down if not negative) it will take 40 years to break even.

This will put a lot of pressure at a lower end of the market.

What are you going to do with those who bought and paid SDLT 5-10-20 years ago? keep them on the old system? they will never move then. Slap them with new tax on the top of SDLT already paid?

You know, cynic in me believes that it's aspiring Labour who can't quite reach the property they want, try to push older cash poor asset rich owners out of their properties to open this opportunities to their own.
It's the same as with private schools VAT - they can't justify sending own DCs to PS from political perspective, so let's make it out of rich to anyone else apart from really wealthy ones of foreigners.

Yes of course they'll have paid less but their equity will be in bricks and mortar
Not necessarily in their bank
So
They’ll have to sell up, many at a loss as No one will be able to afford say £8k a year ctax
And will that sale even cover the amount they currently owe in a mortgage 🤷‍♀️
Burnham is playing with fire

@nearlylovemyusername

1m is only a very average family house in certain parts of London. There are plenty of family homes under that. You need to get out and about more.

Burnhams policy re those who have already paid
SDLT is to do nothing

They will pay the revised tax like everyone else and should be happy that next time they move they won’t have to…( yes Fairer actually say this !)

🤣🤣….. so thoughtful

@BrownTroutBluesAgainwell 8k council tax was the figure someone gave for my parents house which is 1.7m. It won’t be the figure I would have to pay or millions of others.

Why would many have to sell at a loss & be in negative equity?

you see, you only support this because it benefits you, not because it makes any sense.

You moved recently and paid SDLT so you believe you will be exempt.
You want to move again and don't want to pay SDLT.
Your mum wants to downsize so she wouldn't need to pay SDLT.

The problem is that it's a choice to move. You can factor SDLT costs in and make a decision. Being forced out of you home because you can't pay is very different.

And I'd be careful in your shoes - if you or your mum want to downsize, than the lower end of the market will be hellish

@nearlylovemyusernameno you need to read my actual posts. Where did I say I should have an exemption? I replied to a post about people moving now hence my comment about the market grinding to a halt. I plan to move in the next 5 years but I wouldn’t move until this proposal came in.

He's not going to last very long if his only ideas are more tax.

Taxing people reduces the incentive to work.

Less work = lower economic growth

We need lower taxes and lower benefits. This message is hated on here - mainly I think because everyone knows it's true but hopes (on the benefits) side that it won't affect them.

@nearlylovemyusernamewhy do you keep making assumptions about my mum? She may decide to move this year or next. Why on earth wouldn’t she pay stamp duty on her next home?

How much would you want to pay annually?

And I never said I didn’t want to pay stamp duty. I don’t want to pay a tax which would then be abolished in the near future. I don’t think many would disagree with that!

@EasternStandardwhat would the new amount be on a 950k house for example? In my chosen area this would currently be 3.8k council tax and 40k stamp duty.

It was me that worked out your parents new ctax but a good one to use I think based on your previous posts re your parents house.
ie
Its not just the landed oligarchs that will be affected

Heres another example
A relative of mine
Hertfordshire area

Bought 20 years ago
Ex council house now worth £560,000 but she’s extended into the roof to add bedrooms so this ‘improvement’ will be taken into account ( it’s automatic on all house sales so will be on this tax revision)
Based on similar sized props in the area it puts her house now at approximately £620,000

Her current ctax is £2050
Her revised ctax will be £2976

An inc of nearly £900
Now we can all say everyone needs to sell up, but everyone affected ( and my previous figure of 655,000 didn’t even go down to properties in the £600,000 range)
can’t all sell up.

Oh
the lower end won’t exist for long with this policy
Anything under £500k will be swamped with gazumpers right left and centre increasing prices

@nearlylovemyusernameTo clarify Im
wrong to prefer that stamp duty is abolished because that is a benefit to me if I move in the future plus I think it’s prohibitive for younger people but the person who bought years ago and cannot afford to pay increased property tax & wants to keep the lower benefit they current have has the moral high ground?

£4560 and increasing year on year forever
The council build a new school or put a train line nearby your house would inc in value well over inflation and so would your
new ctax.