Tax On Houses On Its Way?

[bankfeeder]

Mr Cable said: "If that (the 50p rate) were to go, it should be replaced by taxation of wealth, because the wealthy people in the country have got to pay their share, particularly at a time of economic difficulty.

"How exactly that is configured is a detailed matter for negotiation. But that principle must be upheld, and a mansion tax actually is a very economically sensible way of doing it.

"But there are different ways of doing it. It can be done through local government as well as central government. And providing the principle is accepted - that taxation should be related to property - and there are vast numbers of extraordinarily valuable properties now around in the south of England, netting very large gains for their owners, many of whom come from abroad incidentally.

http://www.bbc.co.uk/news/uk-politics-17260348

But will they avoid the unintended (but perhaps desirable) consequence of all "wealth" being devalued to a value just below where it becomes taxable?

[Gone baby gone]

http://www.bbc.co.uk/news/uk-politics-17260348

But will they avoid the unintended (but perhaps desirable) consequence of all "wealth" being devalued to a value just below where it becomes taxable?

They could also do something cunning like offsetting any PAYE paid that year against your "property tax"... which would mean regular homeowners largely avoided it, but non-doms / speculators couldn't.... <strokes chin>

[The Knimbies who say No]

Cable is a buffoon, and his pronouncements ought to be treated with the same seriousness as a demented uncle, even if now and again his ramblings approach coherance.

Edited March 6, 2012 by cheeznbreed

[Gone baby gone]

I've always thought that land / property would be an obvious target for additional taxation. Very illiquid and the value reasonably easy to establish approximately.

[Bruce Banner]

Why not just drop the 50% band and the 40% band and tax everyone at 20% but close all the loopholes so everyone pays it.

[Game_Over]

They could heavily tax second/third/fourth homes.

Oh wait

Most politicians, including Labour own at least two properties

So is that ever going to happen?

Answers on a postcard to..............

[R K]

Vince was correct with this first time around.

Just add the tax to electricity/gas bills or higher rate council tax band.

#taxytaxy

[RentingForever]

Cue outraged stories in the Mail and Telegraph about poor old grannies and grandads in the south-east with big houses who would be liable for this tax "even though they're not rich"

[TheCountOfNowhere]

The only thing of any worth left top tax is houses....

[phead]

Bad idea. Politicians are like vultures, give them a new tax and they will eat it all till there's nothing left. This will be a property tax for everyone within 10 years if introduced.

Why not have more council tax bands, that would tax the top end evenly across the country.

[Mildura]

Why not just drop the 50% band and the 40% band and tax everyone at 20% but close all the loopholes so everyone pays it.

Far too simple, straightforward and logical. They'd never think of something like that.

[Kurt Barlow]

I've always thought that land / property would be an obvious target for additional taxation. Very illiquid and the value reasonably easy to establish approximately.

Only if the legislation is robust enough. We already have a form of property tax called Council tax and local authorities like Westminster and Kensington and Chelsea have big problems getting Council Tax out of absentee owners (Russian Oligarchs, Radges, Nigerian oil execs ) of properties worth £10m plus.

Remember - taxes are for ordinary people not the rich!

[easy2012]

Only if the legislation is robust enough. We already have a form of property tax called Council tax and local authorities like Westminster and Kensington and Chelsea have big problems getting Council Tax out of absentee owners (Russian Oligarchs, Radges, Nigerian oil execs ) of properties worth £10m plus.

I am wondering if you have any reference for those? Thought they can send in the baliff ?

[cica]

Why not just drop the 50% band and the 40% band and tax everyone at 20% but close all the loopholes so everyone pays it.

+ progressive land tax.

Nice.

Edited March 6, 2012 by cica

[libspero]

Cue outraged stories in the Mail and Telegraph about poor old grannies and grandads in the south-east with big houses who would be liable for this tax "even though they're not rich"

"Mansion Tax" sounds like a silly idea/concept/name.. just a broader banding of council tax would be better (% of home value rising at national rate of HPI between sales).

As for the old granny.. if people can't afford their council tax they should simply be allowed to withdraw equity from their houses. No big deal surely? Plus helping to free up larger houses for families who actually need them.

[libspero]

Only if the legislation is robust enough. We already have a form of property tax called Council tax and local authorities like Westminster and Kensington and Chelsea have big problems getting Council Tax out of absentee owners (Russian Oligarchs, Radges, Nigerian oil execs ) of properties worth £10m plus.

They should simply add it up, charge interest / administration and extract it at the point of sale. I expect for people who are that wealthy they simply can't be bothered with the hassle of a few thousand pounds.

[57percent]

I'm amazed this has taken so long to become main stream.

I'd quite like to see:

- 1% property tax on all properties.

- Remove council tax.

- Reduce stamp duty and remove the ridiculous banding. Say 1% for the first 400k, 2% on everything over.

- Reduce inheritance tax (although I'm all for it, no-one with any real money pays it).

I'd make a scheme available, where if you can't afford the tax, but have plenty of equity, then you can borrow the tax against the equity, paid back when you die.

If no-one pays the tax (off shore etc), then the property is repossessed.

[rahhhh]

Cue outraged stories in the Mail and Telegraph about poor old grannies and grandads in the south-east with big houses who would be liable for this tax "even though they're not rich"

story in the telegraph today

[ChumpusRex]

But the very rich have lots of land and property and they will then have the inconvenience of finding a way round the tax via off shoring or creating trusts etc. so a non starter except for collecting more tax from the poorer people. The very rich don't pay tax.

But the big advantage of a land/property tax is that it can't be avoided.

If the tax due on a property isn't paid, the gov can simply seize the property, and sell it. It doesn't matter whether the owner is an opaque overseas corporation. If the tax isn't paid, they'll simply find that they no longer own the land.

[TheMadJock]

Well, I'm going to light some touchpaper on this one...........

How exactly do you value a house? Who does it? What might be their vested interests either way? What if someone has an interest-only mortgage, as we're always reminding people here that's effectively the same as renting? Other mortgages, should the debt of the mortgage be subtracted from the 'value' so that a nett wealth can be established and taxed? What about someone who can afford to rent a bigger house than someone else; should they be taxed more?

Sorry but I think it's all waffle, the usual guff from those who want to socially engineer our lives in any and every way. I'm off to work now so won't be here to see the replies, no doubt I'll be accused of trolling but think about the questions I've posed.

[The Knimbies who say No]

Well, I'm going to light some touchpaper on this one...........

How exactly do you value a house? Who does it? What might be their vested interests either way? What if someone has an interest-only mortgage, as we're always reminding people here that's effectively the same as renting? Other mortgages, should the debt of the mortgage be subtracted from the 'value' so that a nett wealth can be established and taxed? What about someone who can afford to rent a bigger house than someone else; should they be taxed more?

Sorry but I think it's all waffle, the usual guff from those who want to socially engineer our lives in any and every way. I'm off to work now so won't be here to see the replies, no doubt I'll be accused of trolling but think about the questions I've posed.

I'm not sold on this policy, but I guess the values would be determined in a similar manner to those for Council tax, which seems to work ok, a bit of wrangling aside.

[RichB]

I'm amazed this has taken so long to become main stream.

I'd quite like to see:

- 1% property tax on all properties.

- Remove council tax.

- Reduce stamp duty and remove the ridiculous banding. Say 1% for the first 400k, 2% on everything over.

- Reduce inheritance tax (although I'm all for it, no-one with any real money pays it).

I'd make a scheme available, where if you can't afford the tax, but have plenty of equity, then you can borrow the tax against the equity, paid back when you die.

If no-one pays the tax (off shore etc), then the property is repossessed.

That's simply fiddling.

Nothing wrong with stamp duty and the 'ridiculous' banding.

Banding of it is pretty sensible:

http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm

Up to 5x average salary nothing to pay - its a home.

Over 5x but up to 10x average salary - 1%, it's a bit of a luxury purchase.

10x - 20x average salary - 3%, clearly you have more money than sense, so share the wealth.

20x - 40x average salary - 4%, come on now, being a bit silly with this spending aren't you? Pay up.

More than 40x average salary - 5%. Fairs fair, probably don't pay any income tax, but keep spending you rich *******.

The problem with stamp duty is twofold

1. avoidance

2. no one seems to understand this is the governments way of saying your house is overpriced.

Kill the avoidance loopholes and everyone is happy.

Oh - and stick VAT on luxury purchases: anything over 40x average salary should pay VAT @ 20% for being a flash git.

edited to add link to her maj's revenue.

Edited March 6, 2012 by RichB

[57percent]

What if someone has an interest-only mortgage, as we're always reminding people here that's effectively the same as renting? Other mortgages, should the debt of the mortgage be subtracted from the 'value' so that a nett wealth can be established and taxed? What about someone who can afford to rent a bigger house than someone else; should they be taxed more?

Sorry but I think it's all waffle, the usual guff from those who want to socially engineer our lives in any and every way. I'm off to work now so won't be here to see the replies, no doubt I'll be accused of trolling but think about the questions I've posed.

For me it's about sharing the tax burden. You could go out and work for 80hrs a week and be taxed up to around 75%. But your house could increase by £10m (for doing nothing) and you pay zero (other than a tiny council tax).

I'd go with the 1% on all property. Mortgage irrelevant.

If rented, the owner pays, but can obviously try to increase the rent to cover it. I feel the rental market is much more bound to wages, so there's a natural maximum there.

A house is a huge resource to be using. Should have a reasonable share of the tax raising burden.

[zugzwang]

Or alternatively, stop debauching the currency.

Restore base rates.

Let the market generate the taxes you need to balance the budget out of savings and consumption.

[57percent]

Nothing wrong with stamp duty and the 'ridiculous' banding.

....

Kill the avoidance loopholes and everyone is happy.

By the ridiculous banding, I was meaning the holes in the market it causes. 250-260k etc.

The avoidance should be very easy to kill and I expect that to come in this budget.

But, without a property tax, you still have a lot of people who have made a huge tax free gain and use up a scarce resource without paying anything back to society.