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

And the facts don't change just because you want them to.

Indeed.

Who said you were pledged to a political party? Certainly not me.

I was careful to use the word ‘seems’. And the economic ideas you have revealed on recent threads would be understood by most working economists as right of centre. That’s a statement rather than a criticism.

Everyone can see that your ‘5/10’ mark for AB in Manchester is unevidenced.

So where are the lies?

What is unfair is that many in the south east already paid astronomical amounts of stamp for fairly average homes.

to rhen abolish stamp but have the same people paying significant sums of tax is crazy.

hopefully there will be a common sense approach when phasing it in, but given how Labour operate - unlikely!

0.45% annual tax on a reasonable valuation of our house which we have lived in for 15 years, would be about £1000 more per year in council tax. This is London. We did pay a fair amount of stamp duty too 15 years ago.
However, if it is an unreasonable overoptimistic valuation it would be substantially more and therein lies the crux. What valuations are they going to be using for land and property on it. What deductions will be allowed and what will not.

So let’s assume my house is worth £1000000, I paid 15000 stamp duty or so (cannot remember) 15 years ago and I pay circa £3500 council tax on it at the moment. I have purposefully picked higher figures because this is London after all.
0.45 of a reasonable of a million would be 4500 a year. Of which there should be an allowance to deduct stamp already paid in the last X years (up for discussion). And obviously if they overinflated the value of the house at 1200000 the figures go up.

So the key is in a fair and reasonable valuation relative to purchase price paid (plus inflation) and then allowable deductions for those who did pay stamp duty, especially recently. So if you can deduct all stamp duty paid in last 10-15 years max kind of thing.

For those who bought a house in 1970 who did not pay stamp and the value went up, they will just have to pay the extra £1000 a year in council tax. If they cannot afford it let it be an accumulated charge on sale of the house if they are elderly. Like a tax debt owed.

In any event, it is a massive exercise which can never be implemented in the next 36 months by when a general election is due by law. So not sure why everyone is getting so worked up!

I think it will depend how far down the road Labour get in ‘working through’ the figures
New Governments often don’t abandon a policy. They simply blame its introduction on the Party before them.

fwiw The Fairness current proposal states no one will get any type of allowance because They're already paid stamp

Sure but I think the aim of the whole thing is to allow the younger generation to access the property market without having to foot stamp duty upfront and also to charge people sitting on land unnecessarily (land banking) so it is either sold or developed.
Of course an easier thing to do would just be to charge the landbankers a LVT and exempt everyone else and allow first time buyers to opt into LVT instead of stamp.

We cannot just get rid of stamp again as it inflates the housing market unnecessarily.

I agree developers hoarding land and slowing house building to dictate prices is wrong
We have a big landowner , Shepherd and Neame, here doing it.

LVT could definitely stop that

I also agree with stopping stamp and spreading the cost out

Adlington is in Cheshire East, not GM, and has never been truly “affordable.”

It essentially has a Starbucks, some rather large houses, and some fields - it was never the kind of place that would welcome building, and £400k in that area is actually not that bad.

None of that is anything to do with Burnham though.

Person on GB news just now saying that Manchester is just propaganda, he has got a few shiny new buildings up that"s all, Manchester it in no way an "economic powerhouse". They also mentioned how QE and "money printing" became the new wealth creator, when it used to be industry manufacturing and innovation.

They need tax, much less people are buying now, easier to tax sitting property owners, they don"t have a choice whether they pay or not and can"t really "offshore" their house? The SD stunt won"t work so well a second time IMO because people have seen how quickly rates can rise now, save a few thousand to overpay by tens of thousands never was a smart move, but the risk of rate rises on top make it an even dumber one.

GB News, FGS.

In June (last month) the highly esteemed Reuters Institute Digital News Report did a survey on the trustworthiness of the five main British television news sources.

GB News came bottom by a long way. It was the only one of the five with a negative trustworthiness rating. Its rating was -15.

I notice you mention no evidence behind this GB News person’s assertions. Surprise - not.

Too much tax hinders growth though so if they want growth they need to make tax neutral at best or even less and deregulate. The planning and legal and regulatory requirement is extremely difficult now in the UK and large infrastructure projects in particular are way too expensive and slow because of it. It is admirable to save the bats and fish from dying out, of course, but the cost benefit analysis has not worked out at all neither for HS2 nor for Hinkley 2. We cannot reindustrialise without deregulation and pushing things through quicker. And to push things through you also need a lot more talent in local government so that the people looking at it make good decisions and quickly.

Not difficult to DYOR on QE, everything they said was correct, if a very basic broad brush strokes discussion of the issue, my only recent experience of Manchester is quick dashes through Manchester Piccadilly to get to the Peak District, Manchester might be a bit more shiny than it used to be but it is a still a large stressed city full of people who are being financially farmed.

I happen to agree that the UK needs a stronger manufacturing base and less reliance on its role in financial services. And it is true that some of the latter is moving to Manchester. But so are the media and tech industries amongst others. These are pretty solid.

I visit U Manchester. A lot of partnerships with industry are springing up. This is a knowledge based sector. It includes manufacturing.

I also agree QE is something to be wary of. However it is a global phenomenon.

I am confident that the Mancunians I know do not feel they are being financially farmed. Most of them are strong supporters of AB.

PS Again, @KeepPumping , you exemplify that AB’s critics are demanding evidence for any positive statements about his policies, then turning around and refusing to provide the same.

Lazy or hypocritical?

AB isn"t the farmer, he is just one of the small chess pieces, according to the person on GB news the financial stuff is leaving London and mainly going to the U.S, and as they also mentioned the QE thing has been scaled way back in the last few years, the bond market won"t tolerate it now, you need all the central banks on the same page for that.

They are just saying that it takes more than being called "King of The North" and doing some commercial real estate deals in Manchester.

The biggest hit on the UK financial services industry in recent years has been Brexit. GB news won't mention that. However, it's still an important source of revenue for the UK and though we shouldn't be reliant on it (in fact we should work to be less reliant) it should still form a part. Having it spread over the country than in one place makes sense.
One of the big issues for the UK is that the value of stocks/shares sold in it's market (comparable to predicted future earnings) is well below the value of stocks/shares sold on the US market. This understandably incentives anyone listing their companies to go for the US option. Whether the UK market is underpricing stocks, or whether the US market is overpricing stocks is the big question. Imit certainly feels quite heated at the moment...

Those who are characterising LVT as an unfair left wing idea may be interested to know that its historical advocates include

Adam Smith, the father of Economics
(in The Wealth of Nations)

Winston Churchill

Margaret Thatcher’s economic guru, the
American supply side economist
Milton Friedman

This comes via the OP in a thread started by @MikeRafone in the News forum on 19/06 and verified by me.

Interesting, no?

Milton Friedman that well known communist sympathiser!

Ha ha! The de facto head of what was then the most right wing major School of Economics in America, giving its name to a movement ( The Chicago School).

Land Value Tax - there are a lot of benefits to it if applied wisely.

The proposal being discussed is not a LVT though, it's a property value tax.

Two very different things.

We need to wait for the details.

Unlikely that GB News is going to be positive-or even neutral- about AB…