Proposed Property Tax
“Tax Houses Over 500K”
Chancellor Rachel Reeves is exploring a major overhaul of property taxation in the UK, aimed at raising revenue without increasing taxes on working people. Here’s what’s on the table:
What it replaces: Stamp Duty on owner-occupied homes.
Comment: Except 50% of homes in London would be affected, and 500k in London buys you very little, so we are not talking about actual ‘wealth’ for at least a percentage of those affected, as this plan would target people living in an expensive city, which doesn’t necessarily correlate with wealth. Conversely the North East statistic is nearer 5% of properties.
This would definitely increase taxes for some working people. Not only will these people have worked hard to save sufficient to have a deposit for a 500k+ home, and paid for it, likely with a mortgage on which they paid interest, and perhaps have already paid Stamp Duty when they purchased, will, under this proposed tax, have to give yet another sum to the government when they sell it.
If this were to have any chance of working, then the 500k value needs to be adjusted for areas where normal 2 or 3 bedroom properties cost 500k or more. I cannot see how this will not definitely affect votes.
In addition, logic states that this may make no money at all as people may decide not to bother moving. Thus, stagnating the market even further…that doesn’t sound like it makes much, if any sense.
Council Tax Reform (Longer-Term)
Comment: Council tax has always been unfair. Wandsworth is one of the richest boroughs in London, yet CT there has always been the lowest in the country. And there is the strange national anomaly of giving a single person a 25% discount, whereas a family where each adult is disregarded gets a 50% discount. And a family of 3 or more adults still only pay 100%. But then Poll Tax, where the government tried to get everyone to pay an additional sum individually didn’t work either.
The reality is, taxes should come from individual/company income, not house value. And if the government would only work harder to get those corporations who fail to pay the correct level of tax, they could use that to help offset the £51B black hole in the UK’s finances.
Political and Public Reaction
Some Labour MPs support the move as a form of wealth tax, while critics warn it could alienate voters in affluent areas who recently swung to Labour.
The Treasury is modelling the impact ahead of the Autumn Budget, expected between late October and early November.
Comment: They clearly haven’t thought deeply enough, because it’s not a ‘wealth tax’. Let’s see what happens.
Lea Christiaanson, No.53