Replacement of Stamp Duty with Land Value Tax

[AnalyticalChick]

I was reading in Money Week that all the political parties see an ongoing annual Land Value Tax as the preferable alternative to Stamp Duty.. The change is likely go ahead within the next few years. Would MNers prefer to pay Stamp Duty on an initial property purchase, or an annual LVT on the value of their property?

Funrequirement
all the other ie other than the USA
The USA has non recourse mortgages which are a ridiculous distortion of the market
and the USA allows mortgage interest to be offset against tax - which only benefits the wealthy

Countries in Europe and elsewhere in the world operate LVT very effectively
hopefully the UK would follow them rather than the USA

Ah I see. A bit of a blunt instrument. I wonder if the public will get behind this. I suspect the older voting generation won’t.

It would be a tax on the value of land rather than property, wouldn't it?

I can see how it might be fairer than Council Tax but lots of difficulties that I can see. For example, you buy a house in a cheap area, knowing that you can afford the LVT. Then the area becomes gentrified, land value goes up, LVT increases. Suddenly you can't afford to pay it...

The moral of the story is that if you live in a high value house and are on a low income, it is probably best to sell now, before the rush.

The moral of the story is that if you hang out on MN for not very long you see that Analyticalchick is a regular poster with an agenda desperate to bring about a house price crash so that she can afford to get on the ladder.

The point of a land tax is that its impossible to avoid ....

The land is on that street. The owner of the land owes the tax.

So if a gazillionaire wants to register the property in Monaco he avoids all stamp duty, but because it is still in Knightsbridge, land tax is due.

If Amazon want to funnel their profits through Bermuda, they pay no corporation tax, but the land tax on the warehouse is unavoidable

@Whatthefoxgoingon Yes. If someone owns 200m2 on such and such a street, their tax bill will be £x/year. If land on that street goes up in value, owners will pay more tax, regardless what is built on the plots.

FunRequirement that is terrifying. Most people buy houses in the hope that once they have paid off the mortgage, that's it, they're secure and no-one can ever take their home away. The USA model is very cruel.

fullfact.org/economy/labours-land-value-tax-will-you-have-sell-your-garden/

Suggestion is it is only something that would be explored by political parties and would replace Council Tax and Business Rates. Based on land not house/building.

@user187656748 It is very intellectually lazy of you to attack the messenger. But that will not stop the civil servants who are working on it right now. And it will certainly not prevent the tax bill from landing on your doormat.

I think there has been some scaremongering by the OP here.

Agree with luljakey
LVT would be part of a re structure of the tax system
towards local income taxes to replace council tax
and move corporate taxes to the turnover location model

the down side is that without smoothing efforts, we would get rising area inequality like in the USA
so a bit of French style tweaking would be needed.

Its old news though - it was part of the labour manifesto. You're rehashing it now for your own agenda.

And I would probably see a smaller tax bill landing on my doormat since my council tax is in the top band but my (admittedly fairly large amount of) land cannot be built on (and if it could I'd have sold it donkeys years ago) so it is worth very little unless you're a keen squirrel watcher.

The reality is that if this was introduced it would have to bite on new sales only since otherwise the economy would go into freefall. Most people, however large their property, don't have tens of thousands of pounds going spare.

This si quite a good summary of the issue:

fullfact.org/economy/labours-land-value-tax-will-you-have-sell-your-garden/

@Ta1kinpeace Yes, it would be part of a restructuring of the tax system, which is undeniably moving in the direction of extracting more tax from property, which cannot be moved overseas.

user187656748
Its not old news.
It was one of the major editorial points in last week's Economist.

@user187656748 It was a Money Week round table discussion, where property experts said it is in the pipeline, and supported across the political spectrum. They say it will happen in the next few years.

analytical
which is undeniably moving in the direction of extracting more tax from property
Sorry but I see absolutely no evidence of it happening under any of the Governments that do not already do so.
It should
but it isn't

The proposed system is old news though Ta1k

It would send the economy into freefall. There would be repossessions left right and centre.

@IWannaSeeHowItEnds Couldn't agree more.

I've not seen Labour's one.
I tend to ignore their policy commitments since Corbyn took over as they will never be in a position to effect them

I'll stick to the version I see in the Economist and the FT which already works well in other countries.

Older homeowner on limited incomes would simply not be able to afford to stay in their homes. Essential workers living in relatively small houses in London would see their living costs spiral since the land is very valuable compared to the value of the building.

It isn't a vote winner.

t may work well in other countries where the system has bene in place for many years and people have accounted for it when making purchase decisions. We haven't had that system.

@Ta1kinpeace What about the new system of taxing landlords more heavily, that is currently ramping up? Money Week says that is just the beginning of the move towards greater taxation of property in general.

Essential workers living in relatively small houses in London would see their living costs spiral since the land is very valuable compared to the value of the building.
Surely that depends ENTIRELY on the rate at which the tax is set?
And it will not be the same nationally (same as it isn't in all US states or French Departments)

I hope it happens but I wont hold my breath!