Does anyone actually know what the property tax is rumoured to be?

[kirinm]

I’ve read a few bits and pieces and all I’ve gathered so far is they may get rid of stamp duty (a good thing for me personally) but then bring in other taxes which might include a general property tax and / or capital gains?

For buyers, surely the change is a positive one unless I’m missing something?

(Stamp duty on our current purchase is nearly £60k so if we somehow manage to avoid it, that would be brilliant).

No nobody knows yet, probably including Rachel.
Expect new ways to get more money from property though, not less. Along with tax rise and possibly spending cuts. They have no choice

im desperately trying to complete before the Budget, i can only think they'll find ways for it to cost me more money - not less.

There are lots of rumours - wealth tax, cgt on all sales, changes to sdlt. No one knows, its all speculation.

If your stamp duty is £60k, that’s an expensive house, so I’m not sure you’ll be benefitted by any property taxes, even if you avoid the immediate stamp duty.

Oh no I’m absolutely sure we will end up having to pay a lot of money whatever happens. My worry is we will end up paying both the ridiculously high stamp duty AND the new property tax whatever it may be.

It is an expensive house but we are in London and prices are high for not very much.

We’ve been trying to buy for the last year and a half and are now on our third attempt. We have a chance of being able to exchange before November but definitely won’t complete by then.

There’s really no way to know. A guardian article last month said this (the last sentence may be of interest to you but obviously no one has any actual idea what any details would be).

Sources said Treasury officials were, in part, drawing on the findings of a 48-page reportfrom the centre-right thinktank Onward, which was published in August last year.
This put forward the idea of a 0.54% annual tax, with a 0.278% supplement on the portion of any value that exceeded £1m, which it said “would raise the same amount as stamp duty”. The tax would be levied only on properties valued at £500,000-plus, and only on the portion of value above £500,000. The thinktank proposed that the overall amount due would be paid when the property is eventually sold, but anyone who had already paid stamp duty when buying their house would not be asked to pay this tax in addition.

Probably not a bad time to buy as the market is frozen in anticipation of the budget. Tooted mansion tax would be up to 1% per annum for property >GBP 1M. So in your case be ready for up to GBP 12k annual tax on top of stamp duty. This would be the worst case scenario and they might choose instead to charge it upon the property sale.

As a purchaser in your price bracket op, you also need to seriously consider how any additional tax burden on the property will effect its value. I really really wouldn't exchange before you know the detail. If they set price brackets that increase the burden with an arbitrary threshold then that is certain to have significant extra negative effects on those property's. The threshold could also be revised, downward, at any point where they felt more tax take was required. Need to wait if you can and see exactly what kind of hair brained schemes they come up with.

Why are they trying to break the housing market ffs?!

The avg residential property sale price last yr was £280k. If the threshold is £500k & only taxed for portion > £500k, the very vast majority of buyers won't be affected.

I realise that London, Cambridge, Oxford are different... somehow people buy there in spite of their astonishing property prices, though. Would an extra 0.5% on the portion > £500k of purchase price really be much burden, though, given the huge amounts that already have to be raised for deposit & to pay mortgages?

I think the problem is not that they are trying to break it now - more that it has been pumped with so many props for so many years and has been awash with tax free gains. This was temporarily an easy way to create percieved "growth, wealth and jobs". Great for a limited amount of time...
The problem now is it's having an opposite effect. Such a high proportion of income is being used to service mortgages, debts and rents around housing - that real growth is becoming almost impossible without severe inflation.
The truth is that cheaper housing will help massively because that extra money would return to more productive use in the general economy. I'm heavily invested in property personally but I can't argue that cheaper housing wouldn't be better for everything other than my own net wealth.
Personally I would rather not see the government take the extra taxes because it's sure to be spent in the usual uneconomical fashion. But that looks like how it's going to be.

£500k won’t get you a flat in half of London. I’d imagine that lots of people (including us) stretch themselves to extreme levels to be able to buy at all.

£1.0m buys you a 3 bed terrace where I live. It’s totally ridiculous and it is not a fancy area.

Is the aim to bring house prices down because it just sounds like nobody will be able to afford to move and / or pay their mortgages.

Perhaps the stretching to extreme could stop and that might have a positive effect on overinflated prices?

I hear you but it makes it far too easy and tempting for them to adjust the threshold say to £250k to fill the next "unexpected" black hole. That's what I would expect if such a scheme was implemented.

It’s just going to be people who work and pay mortgages that will have to pay again… yet the benefit gravy train continues. It’s not immigrants that are the problem it’s the home grown benefit scroungers that know how to play the system and get more than many people who work through fraudulent PIP claims. The system is now totally broken and rather than fixing it, they will be punishing those who are trying to fund their own lives and are paying for the benefit system. Benefits should be for genuinely disabled or sick people or to tie people over until they find new work. Young healthy people should be found community jobs for getting payments.

It absolutely shouldn’t have to happen. It is all the stamp duty holidays and low interest rates that have helped cause the massive increase in prices. But we are where we are now. A massive housing crash isn’t what the country needs. But I also agree that constantly propping up the housing market has been so damaging. I’ve no idea what the answer is.

What I do know is that just because people living in London are having to pay ridiculous prices for housing doesn’t mean they’re all ‘wealthy’.

My plan was always to downsize when I retire to release equity (freeing up a family home too). If I’m going to be taxed on that though I may well stay put! I love my house! Surely lots of ‘empty nesters’ will feel similar?

I think it’s already broken……

"What I do know is that just because people living in London are having to pay ridiculous prices for housing doesn’t mean they’re all ‘wealthy’.

Absolutely correct, in fact often the opposite is true. They are simply more obligated debt slaves in a lot of cases, particularly as new entrants.

I think that many of us would think your is a fancy area. It must be quite central London or Oxford maybe?

This is the problem. Many houses worth over £500k are owned by empty nesters currently planning to downsize, who will stay put.

It’s not central London. But that you think a 3 bed house in central London would only cost a million pounds shows you don’t understand London prices.

It's almost 1m for a terrace where we live in London and it's an area MN quite often says they wouldn't live in because it's too rough.

I was watching a Instagram reel a little while ago and apparently all of the major pension corporations are buying up residential property for the portfolios which will mean more and more renters.
That limits the amount of money they will bring in from Joe blogs in the street in Property
But it could mean huge revenue streams from corporate buyers.
If the plan is that we will own nothing and be happy then actually it’s a good move. We want corporations to pay their share right?

It really is. I didn’t realise how broken until we sold our flat earlier this year and agreed to move into rented until we found somewhere. Rents are mind blowing.