Burnahm Land Tax Replacing SDLT

[maureenponderosa]

https://www.standard.co.uk/news/politics/andy-burnham-tax-london-land-value-council-stamp-duty-b1286586.html

While I think this is overall a very sensible approach, and do think Stamp Duty is a tax that discourages market movement, I’m a bit worried about this.

We moved recently. Paid £30,000 in SDLT. It will be so galling to have to then pay a stamp duty replacement tax when we’ve already paid so much in stamp duty.

I wonder how this would be rolled out. Would it apply to all purchases after a certain date or to everyone whether they’ve already paid the tax or not.

Hoping it would be the former.

Any speculations?

Headline mentions London but we’re nowhere near. Very rural. No London salaries.

People seem to be coping well so far, half the country is in debt up to their ears and has been for decades, the problems start when the cost to service that debt soars, AB is certainly the guy to get interest rates jacked up IMO.

Fictional couple have inherited lots of money
The children of boomers will be loaded when they inherit
Especially if IHT is set at 10% with no care costs

No care costs? How will that be paid? Loaded if they can find a buyer who can borrow enough, so maybe not as loaded as they thought?

The no care costs relate to one of Burnhams favourite policies ( as we are looking at the future under him on this thread )

Then there’s The UK’s "Great Wealth Transfer"
an unprecedented intergenerational shift that will see an estimated £5.5 trillion to £7 trillion in assets—including property, pensions, and business interests—passed from Baby Boomers and the Silent Generation to younger generations like Millennials and Gen Z over the next two decades.

Absolutely agree

My bet is it will be a short future, he won"t be around to fight an election. The best we will get is that he is going to be sharper with the comebacks to KB, although 2Tears did quite well today with the "500 years" gag, made me almost laugh.

Watching 2Tears at PMQ"s it is obvious that he is completely delusional, isn"t it?

From the post you responded to - " People may not like stamp duty, but at least you only pay it when you buy. A land value tax keeps coming year after year regardless of whether you can actually afford it. If your house value rises but your income doesn't, where is the extra money supposed to come from?"

The problem is that no one is buying and they need tax from somewhere, but they also know values won"t be going up anymore (that isn"t a problem though)

At least with stamp duty you know what you are paying and you can save up or add it to your mortgage. With LVt you can’t plan as the amount can change and your circumstances can change

It’s way too stressful. Income tax is related to income so it only goes up if you have more in hand.

A high LVT is financially stressful and could be ruinous.

100% agree

Labour in shit policy shocker

I’m assuming they don’t value every home but instead work out a per sqm charge and then apply it? and then you can appeal if you don’t think it’s fair because maybe some of your land is suboptimal?

Every home is (or will be) on the LR. It's easy to calculate.

Maybe it will be a % of the sale value of a property

Very basic figures by developers ( years ago ) were 1/3,1/3,1/3
ie
1/3 to buy the land
1/3 to build the property
1/3 profit

As the cost of building isn’t the same as sale price
Perhaps
it will be 1/10th of a property sale varying by area

I doubt they’ll be measuring on LR everyone’s land. LR is a guidance only for starters and I doubt they’ll be out measuring it on site either

Heres a basic Google for Kent

‘ In Kent, land value relative to property price depends significantly on the land’s designated use and location, with residential development land typically accounting for 20% to 40% of the completed property value
whereas raw agricultural or amenity land is valued far lower

Whatever it is, it won't be thought through, will be badly implemented, take forever, involve countless civil servants and stall the housing market for even longer (and all the knock on industries that rely on it)

This from googling

Andy Burnham’s proposed Land Value Tax (LVT) would be calculated as an annual percentage based solely on the market value of the land a property sits on, excluding the value of the buildings or improvements. 1, 2, 3]
Under the models he has supported, such as those from the Fairer Share campaign, this LVT would replace both Council Tax and Stamp Duty. The specific mechanics of this include: 1, 2]
The Tax Rate: Homeowners would pay a flat levy—typically proposed at around 0.48% or 0.5%—assessed against the capital value of their land. 1, 2, 3]
The Calculation: Annual LVT = Assessed Land Value × 0.0048 1, 2, 3]
Valuation Process: Government authorities, such as the Valuation Office Agency, would regularly assess the underlying economic value of each plot, rather than assessing the property as a whole. 1, 2]
Reliefs: Mechanisms like tax deferrals are frequently discussed to protect "asset-rich, cash-poor" individuals (e.g., pensioners), allowing them to defer the tax until the property is transferred or sold

Interesting - but the value of land is related to its potential? Sounds complicated

so the little old lady with a house on a plot that could be converted to a block of flats could have a higher charge than the neighbour with a listed house that can’t be touched?

I think it’s a great idea- replacing two unfair and harmful taxes with one (hopefully) fairer one. It should increase growth as well as mobility.

No
It will just be valued as residential

So you could have a 4 bed family home paying the same as a 8 storey block of flats?

Looking at the figures I’m wondering whether it will replace counvil tax entirely

Taking a £600,000 house LVT as 33% ( between 20-40 so mid way ish for Kent )
means the Land value is £200,000

Using the above figures
£200,000 x 0.0048 =£960.00

That’s the price of my old house and my council tax was £3,500

So I’m wondering if it will be in addition to CT or Burnham needs to re evaluate the sums

Flats are a problem in This calc
simply because they sit on so little land
But as you see from my calc above
None of this makes sense unless Burnham plans to give us all a massive CTax reduction

I agree it doesn’t make sense unless he has the % wrong or he doesn’t understand that land value isn’t the same as the MV of whatever is sitting on the land

i can see a lvt could be a good idea but it’s hard to retrofit on our rather odd housing market

It'll be on market value surely. I cannot see how land value (minus building) could possibly work.

Also I just realised that I have two parcels of land for my house so might get two bills.
I wonder if would be used to discourage land banking by developers. Change the tax on the completed value of the development - that would focus behaviours. But would be a real pain for self builders too.

Maybe the LVT changes when planning permission is approved, but if you botch the build teh market rate would be lower than the potential.

As ever with changing legislation: there are many unknowns and complexities. It all adds to the cost to implement it.