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?

And maybe even a 100% inheritance tax for houses.

Comrade Kim! How's the weather in North Korea?

Warren Buffett and Bill Gates both advocate a 100% inheritance tax, and they are hardly North Korean.

You're confusing me with someone who cares what they think.

You are very offensive. What they think holds a million times more weight than what a nobody like you thinks.

They want their own children to have nothing? Looks like they'll be the nobodies, along with anyone else stupid enough to follow their parents' beliefs.

The people who complain at the idea of a tax based on the real estate, have they never heard of Council Tax? Or Business Rates?

Why are such taxes so frightening?

The country nation has a need for £X of tax take. There is no reason to claim that the size of X varies depending on the method of collection.

Lots on knee jerk on this thread

I agree, public services need money. When they get terminally ill, funding to treat people on this thread needs to come from somewhere. It's just that people always think someone else should cough up the extra tax needed. The Bank of England has given them huge unearned capital gains on their houses, but they are damned if they are going to let any of it slip out of their death grip. Such is human nature.

Why don’t sellers pay the SDLT rather than the buyers? Sellers have usually have more equity for the property in question. Always seemed wrong way round to me (apologies if this was covered, haven’t read every page of thread).

I think part of the problem is that stamp duty is not able to provide enough ongoing tax revenue. The government needs to pay day to day bills, such as wages and debt repayments, and a LVT would give it better cash flow, rather than waiting for the occasional sporadic stamp duty payment from people who are very resistant to ever selling (and therefore triggering the duty).

The people who complain at the idea of a tax based on the real estate, have they never heard of Council Tax? Or Business Rates?

Businesses generate this thing called revenue that can be used to pay the business rates (which by the way are often cripplingly high already). Owner-occupied residential properties don't.

Council taxes are often excessive for the shite services they provide, but at least they are capped so they rarely reach a level that would be impossible for a typical owner of the property to pay from their income.

LVT would be a nightmare for anyone who doesn't have an abundance of income coming in. Quite apart from the impact on property values and therefore on banks' balance sheets and their viability. But who cares about that when there's people in nice houses ready to be milked for all they're worth, eh?

Council taxes are often excessive for the shite services they provide, but at least they are capped so they rarely reach a level that would be impossible for a typical owner of the property to pay from their income.

Council tax is lowest in rich areas
highest in poorest
NOWHERE has excessive council tax
capping is destroying communities

apart from that, fair comment

Business rates are payable whether a commercial premises is occupied and generating rent or not. Just as LVT would be due whether a residential property is occupied and generating rent or not. Business rate and an LVT are the same principle.

I almost hope Labour puts LVT front and centre of their next election campaign. An annual tax on every homeowner just for the privilege of owning your fucking home, which you've already bought with taxed income and on which you've already paid a large wodge of stamp duty out of said taxed income? Bring it on!

@uponthedowns

"LVT would be a nightmare for anyone who doesn't have an abundance of income coming in. "

I see you've already calculated what the rate would be. How did you do that? Was it by plucking made-up numbers from a newspaper?

Business rate and an LVT are the same principle.

Both are indeed deeply unjust, but LVT is even more so, since an owner-occupied property will never generate income, which is the whole point of a business premises.

I see you've already calculated what the rate would be. How did you do that? Was it by plucking made-up numbers from a newspaper?

Are you saying it's going to be the same rate as the current Council Tax? Don't make me laugh - what would be the point of introducing it then?

Considering 41% of adults (and increasing) do not own their own home, they will be well disposed towards a LVT. The Tories and Lib Dems are also attracted to it because the alternative (to close down parts of the NHS) is politically undoable. I personally do not like the idea of a LVT. But I accept it is probably the only way to raise enough money to keep the NHS running.

since an owner-occupied property will never generate income
but it does generate an above inflation capital gain
which can, and should, be taxed

"what would be the point of introducing it"

In suppose you'd have to read some of the discussion documents by the people proposing it. Do you suppose it could possibly be so that billionaires who don't pay UK income tax, and whose companies don't pay UK Corporation tax, but own expensive country estates, and expensive London palaces, chip in a bit more to support the country?

I can see that the proprietors of most of the mass media would object to that.

You are obviously determined to assert that the total tax take will be different if the method of collection is different. That's not true. Every pound that Lord Rothermere doesn't pay, is a pound that the honest taxpayers of this country have to make up, or a pound off the nation's public services.

but it does generate an above inflation capital gain which can, and should, be taxed

Then just impose, er, capital gains tax on the sale of people's own homes, since that's when the capital becomes liquid and the tax can easily be paid. It's a shitty socialist idea that would have terrible knock-on effects, but at least it's a logical way of taxing that capital gain.

In suppose you'd have to read some of the discussion documents by the people proposing it. Do you suppose it could possibly be so that billionaires who don't pay UK income tax, and whose companies don't pay UK Corporation tax, but own expensive country estates, and expensive London palaces, chip in a bit more to support the country?

Can anyone really be so naive as to think that those billionaires are the only people who would be hit by this tax? It would cut a swathe through the middle classes from top to bottom. But either way it's a win for envious socialists who have no talent for creating wealth but are adept at stealing from others.

People would never move to avoid paying a CGT bill. That would kill mobility in the country, dead.

It would cut a swathe through the middle classes from top to bottom.

That only makes sense if anyone agrees with your assertion that the rate would be set at a figure which substantially increases the total national tax take.

There is no evidence for your assumption.

So your assertion makes no sense.

Pippa
Houses sell in the USA - there is CGT on it there
Upon
Your aggressive tone is not needed.
Read up a great deal more please.
The Economist supports an LVT for it efficiency and breadth

they are not known for their socialist tendencies