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?

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.

Did you watch the Labour Party conference? Did that band of reheated Trots look like the types who are going to freeze or cut taxes on the middle class?

Upon
Who is talking about the Labour party?
I am not.
I am comparing the UK with countries that have LVT
and with analyses of the tax system that support LVT

The Economist supports an LVT for it efficiency and breadth

The Economist is not the fucking Gospel, not that that should be taken literally, either!

And no words of mine could ever be as aggressive as vile socialist policies designed to tax people out of house and home under penalty of law, so I'll say what I please, thank you very much.

*Ta1k8 The story at the moment is that older people are refusing to sell and downsize because they are too tightfisted to pay the minuscule pay stamp duty on a subsequent purchase (despite having made a massive capital gain). I think the Brits are probably a completely different mindset to the yanks, and would never move, just to avoid ever paying CGT.

pippa
I've seen no evidence or mention in any of the press to back up your assertion about downsizing (and I'm rather a news hound)

LVT is not socialist
it is the sort of tax which stops the ultra rich and multinationals landing the bill on the lower 98%
which makes utter sense

ta1k It's all over the news that potential downsizers are refusing to pay stamp duty. This is the first story that came up on a google search, but there are loads loads more:
www.thisismoney.co.uk/money/mortgageshome/article-5078361/Pressure-mounts-cut-stamp-duty-downsizers.html

Another one: inews.co.uk/opinion/we-need-to-scrap-stamp-duty-for-last-movers/

pippa
that link is the narrow bit of the Daily Fail empire ....
any other coverage - like in an actual newspaper

A couple more:

www.telegraph.co.uk/property/retirement/stamp-duty-penalisesolder-people-moving-downsize-using-options/

www.propertywire.com/news/uk/call-downsize-package-uk-include-no-stamp-duty/

I'll say what I please, thank you very much.

A very persuasive argument.

You've certainly convinced me.

Meanwhile, in the real world....

The problem with stamp duty and CGT are that they are both avoidable by never moving. A LVT would not be avoidable since it would be paid annually or monthly. I accept the government needs a steady flow of tax revenue that people cannot avoid by hook or by crook.

pippa
One February article and one August article is not "all over the news"

LVT is an idea whose time should come to the UK

Since the British are obsessed with putting all the country's entire wealth into property, that is where the government needs to go to get its taxes. It's like the old joke: "Why did you rob a bank" . "Because that's where the money is".

ta1k There are loads more articles, but I'm not going to list them all here. I knew about the 'downsizers avoiding stamp duty' issue ages ago. I thought it was common knowledge.

How could CGT be introduced now for people who have been in houses for years? You would normally be able to offset any improvement works to a house to the tax owed. Many many homeowners will
Not have kept detailed records of these
Over the years (whereas you would with an investment property).

same way CGT works for all new assets
or how any tax change works

houses are just another asset

But you would be allowed to offset any costs of improving the property and people won’t have kept detailed records of this as they didn’t know they would have to. It would only work on properties bought from the date it was implemented.

What would happen in the town's mainly up north where a house is worth 40k ish.... No way you could build a house on the land for 40k or less now, probably more like 80k. So would the government pay you for the negative 40k that the land is worth?

Poll tax seemed a fairer system to replace council tax with too, don't understand why it was so unpopular

Alexa LVT and poll tax are dimetric opposites. One is taxing property, one is taxing people.

Pippa I think you will find I said poll tax to replace council tax. Which it should because more people use more services, create more rubbish etc so 10 people in a 3 bed house will use far more services than 1 person in a 1 bed flat.
Lvt would come in as a joint replacement for ct and sdlt solving no issue

Alexa It would solve the issue of raising money for the health service etc from the vast wealth that is locked away in property. I am not an advocate of a LVT, but I can see that if the vast majority of the country's money is locked away in real estate, that is where the government needs to look to get its revenue.

Or maybe the government could learn to make do with the vast sums it already takes from us and leave our property in peace? How about that?

I'm afraid much of the money has already been spent, and we now need to find the cash to service and to pay off our humongous national debt. And that's even before we think about funding the health service adequately to treat our ageing population.

The government has money for the health service already, they can scrap vanity projects, no mp needs a paid for meals or 2nd home allowance. If a person on 12k can pay for their own breakfast and lunch then so can an mp on 72k.

They can overhaul the tax rules that allow amazon and Starbucks and Google to pay lower rates here. There are a million other things they can do and quickly like scrap hs2.

Taxing people monthly or yearly on the only asset many of them may have, that they bought out of taxed income and that they paid tax, on is ridiculous and pointless.

So what if 41% don't own. The rental system has needed a massive overhaul for 20 years. The government have not bothered and have missed there own targets on building affordable rent and to own homes. Even so renters may have the opportunity to own one day and they will not like it on the other side either.

And to assume all homeowners are middles class and/or wealthy is ridiculous.

An ongoing amount is what I don't like as it's literally taxed to live in your own home. Not everyone buys a home as an appreciating asset, what about those in negative equity and what about the many of us who don't care what's its worth but just want a home to live in that once paid, no one can remove us from.

It may be an efficient tax but I think it is less fair.

And come off it piglet John, what are the chances that the government will set it low and if lo and behold they did, what are the chances that it rises with or above inflation or its operated by local councils who see it as a money spinner and raise it to ever increasing levels.

The government can raise money quickly with a stroke of a pen ie by reversing the benefit changes overnight, as this actually gives them more money. They are losing more in paying out for temporary and homeless accommodation, they lose more in illnesses due to stress, and addiction and increased alcoholism to those affected by the shitty changes.

They lose more to lost days and half days off work from the low income full time workers forced to go to the job centre weekly and fortnightly under universal credit rules. They lose more from lost opportunities for individuals and businesses due to ever increasing child poverty, so the knock on effect will last years, due to the effect on that person's life and life chances. But hey that government decision is ideological and even though it costs them more on the bottom line, who cares?

Let's raise more tax that we will use in a useless way.