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Re: New stamp duty rules

by rooting4tooting » Sun Apr 05, 2015 9:26 pm

how often will the houses be valued?
Remember the recession of the early '90s. all those repossessions?
our parliamentary masters had better use this extra money wisely...

There is only one way to get more money for the country and that is to earn it. The country needs to grow financially, economically. We need to sell more plates overseas.

Re: New stamp duty rules

by InterestedDad » Sun Apr 05, 2015 2:12 pm

Mummytoone - Take the 800m sibling proposal. A renter will find it pretty easy to work within the rules for a sibling, certainly much easier than getting within catchment for a first child. It's taken a lot of effort to work out this proposal, but I just don't think it will be effective. Indeed the situation is likely to get worse as the number of renters continues to increase (noting strong upward trend in the earlier link).

Re: New stamp duty rules

by pie81 » Sun Apr 05, 2015 10:47 am

InterestedDad, to address your points 1 and 2, I think the best solution would be abolish the PPR exemption, so that people pay CGT on any gain when they sell their house.

this would be a tax on a real gain, at the time that gain is realised, rather than a tax based on a paper valuation, so would avoid the unfairnesses of the mansion tax.

this would also address actuallyadad's point : he wants to keep his money that he earned and paid tax on. Well nobody has earned or paid tax on a house price gain - it's a windfall - which as you say is largely caused by a rising market, housing shortage, etc.

Naturally there would be practical issues to overcome, eg any gain which is due to money spent on the property should be exempt. however other countries manage this sort of system.

If we all paid tax on house price gains I would hope that we would be able to reduce taxes in other areas, eg taxes on income that has been earned and worked for, or sales taxes such as stamp duty which do come out of already taxed income.

Re: New stamp duty rules

by Mummytoone » Sat Apr 04, 2015 11:10 pm

You said: "Very close to home for many NV residents, increased numbers of renters may be the factor that has shrunk catchment areas for primary schools... the catchment area issue probably cannot be addressed whilst private renting remains at high levels." Why so?

Re: New stamp duty rules

by InterestedDad » Sat Apr 04, 2015 9:58 pm

Come to think of it there are other issues created by high house prices. People can't afford to buy, so home ownership declines and private renting increases. See the graph on p13 of this link for what this has meant in London. ... 013-14.pdf

"In London, the proportion of households in the private rented sector
increased from 14% to 30% between 2003-04 and 2013-14".

This trend may cost the Conservatives votes, in a tight election this could make all the difference (whether this is a problem or a bonus depends on your view).

Very close to home for many NV residents, increased numbers of renters may be the factor that has shrunk catchment areas for primary schools. You can talk about sibling rules etc, but the catchment area issue probably cannot be addressed whilst private renting remains at high levels.

I await peoples' views.

Re: New stamp duty rules

by Mummytoone » Sat Apr 04, 2015 2:31 pm

1. If house price increase has no impact on Council service costs, then I agree Council tax is a separate policy issue.

2. There are many negatives associated with increasing house prices, particularly when they result from suppressed housing stock and overseas investment: (I) increases in purchase prices not in line with local wages, which disrupts community ties and (2) a potential unfairness if those who benefit from the value increase are not also contributing to the cost of security services and police forces, for example, that keep the investment safe; the investment protection is funded by the tax of habitual residents.

3. I agree with point 3. But the tax should be means tested, so those not able to afford to pay it don't have to. Means testing is adopted in other areas like legal aid, and in principle I don't see why the mechanism shouldn't be applied at the high earner end too.

Re: New stamp duty rules

by InterestedDad » Sat Apr 04, 2015 2:14 pm

I've got a few questions on this document.

1. Would house valuation for mansion tax purposes trigger an increase in Council tax? Surely this is a separate unrelated policy question.

2. Many people think that high property prices are bad for the economy in the long term. Pricey houses mean that people can't move to where the good jobs are. The Economist leads on it this week: ... e-and-city

3. A lot of price appreciation has come from a rising market (so not through productive hard work, wealth creation etc). Indeed this has a lot to do with restriction on building new housing supply which comes at a cost to society as a whole. This seems to make property taxation much fairer than say, increasing income tax, corporation tax or VAT.

I'd love to hear peoples' views.

Re: New stamp duty rules

by BFW » Mon Mar 30, 2015 10:07 am

A colleague of mine just showed me this letter he received this morning and I remembered this thread (I am not British so I was not sent this as I can't vote at the next general election).

I just thought it might be of interest (and I do realise it is political propaganda - but i thought it still raised some interesting points).
Mansion Tax.pdf
(82.09 KiB) Downloaded 172 times

Re: New stamp duty rules

by supergirl » Sat Dec 20, 2014 11:19 am

Nicely put Astolat.

As much as i would like to keep all my money to myself (dream), i feel very lucky to live in a country where there is a proper tax system, with people at HMRC being really nice and helpful (i had a few questions regarding our nanny when we had one), in a country that have decent roads, relatively clean, with green areas and a decent school and health system.

The mansion tax is unfair because it is based on the value that a house is worth but the owner can not benefit of that value unless he sells if he finds a buyer willing to pay that price.

But anyone calling themselves a squeezed middle while living in this area in a house worth 1million is an hypocrit. If you feel squeeze maybe it is time to re assess your budget: downsize, change areas, take kids off private school, SAHP maybe go back to work (in the long run you ll be better off), change car, etc.

Re: New stamp duty rules

by Astolat » Sat Dec 20, 2014 10:37 am

Actuallyaddad a rich person wanting to keep as much of their money as possible rather than it go towards public services or to pay down the deficit is absolutely their prerogative to argue for. But I just want to be clear that that is what this is about. Not that a tax on multimillion pound property is actually going to make things hard or difficult for many / anyone in nappy valley.

I just feel the argument about 'squeezed middle' and hardship is disingenuous and shows a lack of perspective of how well off you are and understanding of what struggling really is.

Re: New stamp duty rules

by TFP » Fri Dec 19, 2014 5:56 pm

Astolat wrote:...
yeah, fair enough.

earning £160k puts someone in the top 1%.

i don't really mind the UK English [as opposed to say US] ultra-widespread use of the term "middle class" whereby [say] a £25k a year northern daily mail reader & a £250k a year [and the rest] london financier can both use the term, entirely straight-facedly, to describe themselves, despite the fact that each would barely recognise the other as being of the same species should their paths ever cross.

but it's at best a touch crass, at worst ridiculously disingenous/offensive, for a top 1%-er to describe him or herself as "middle class" in a discussion about who's squeezed etc.

Re: New stamp duty rules

by actuallyadad » Fri Dec 19, 2014 5:20 pm

yes I definitely want to keep more of my cash (which I earned and paid tax on) to buy nice stuff. Not sure why anybody would have a problem with that?

Re: New stamp duty rules

by AbbevilleMummy » Fri Dec 19, 2014 3:54 pm

Couldn't agree more Astolat. Very well put.

Re: New stamp duty rules

by Astolat » Fri Dec 19, 2014 3:34 pm

The average UK salary is £26.5k The average London salary is £35k. The average UK house is about £270k. The average London house is £517k.

These numbers take into account the extra costs of living in London - by having higher average salaries etc.

The top 1% of wealth (assets - i.e. houses, investment, savings, pension pot etc) starts at £670,000. So if the equity in your house plus your pension pot equals that YOU ARE IN THE TOP 1%. So are Kensington and Chelsea residents - they are maybe in the top 0.5% but don't kid yourself you are in the middle.

So if you are living in a £2m house between the commons then you are very wealthy - Your house is worth 7 times more than the UK average and 4 times the London average.

If you earn more than £35k then you are better off than the London average. If you earn more than £60k you are in the top 10%. My guess is that most of the people in £2m + houses earn a significant amount more than that.

You just need to look at the topics in the new posts section. Private schools, Granite worktops, loft conversions, Performance drama workshops, family gym memberships....

I get that no one loves taxes and no one wants to pay more tax. But please be honest - you want to keep more of your cash to pay for nice stuff. Don't dress it up as being 'cash poor'. People in Wandsworth are going to food banks and skipping meals to feed their kids. That's cash poor.

Re: New stamp duty rules

by AbbevilleMummy » Fri Dec 19, 2014 11:39 am

I simply can't see how the 'mansion tax' could possibly work in our economy and tax regime. Fundamentally, you can't tax unrealised gains. Whether those gains are on a stocks and shares portfolio, pension fund, real estate, whatever, as the market is constantly fluctuating and therefore gains or losses can't be assessed until they are locked in and realised.

If the UK wanted to earn more revenue from taxing increases in property values over and above stamp duty then the only realistic way would be by removing the exception from CGT on principal residences.

This would be tough (and I'm certainly not saying that I'm all for it!), but it would be in line with other countries.