Wednesday, Oct 17, 2007
Why the government shouldn't help people on to the property ladder
MoneyWeek: Why the government shouldn't help people on to the property ladder
Whatever the arguments for changing the IHT rules, helping first-time buyers shouldn't be one of them, says Tom Bulford. If we really want to address the crisis of affordability, there's one key issue to address: the perception that houses are as much about investment as having a place to live...
Posted by mary @ 01:08 PM (510 views) Add Comment
6 Comments
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1. Sold My Soul To The Never Never Never said...
These people didn't even earn their wealth in their homes anyway. It was just fortuitous that they were in the housing market at the time that house prices went up. The next generation have absolutely no chance of getting on the property ladder without the help of mum and dad. Bring on the Housing Crash to turn sentiment! New Labour lost all credibility with me when they doubled Inheritance Tax to pander to the supposedly 6% of homes that are affected. Bring on the Housing Crash and these homeowners won't have anything to worry about!
2. Ilejustwait said...
`BRING ON THE CRASH `, sooner the better to, would like to see all property investers go to the wall,
what makes them so important, people like me and others just want a house to call there own, its not about the money, but may never have the chance becuse of people like this, OR NESS THERE IS A CRASH OF COURSE,
3. p. doff said...
I have to admit to being biased here, but IMHO this is an unfair tax that was originally intended to hit the super rich only. I don't believe the claims that only 6% are affected. With the average house price around £200K, many pensioners who have invested prudently for the benefit of their family and retirement will have estates well above the previous £300K threshhold.
Why should this be plundered by the state to be spent on illegal wars, or handed out to undeserving chavs and scroungers?
4. Cottageplace said...
Too true!
5. This comment has been removed as it was found to be in breach of our Blog Policies.
6. eyeoftheweasel said...
Hi p.doff.
I have to say that I don't agree that inheritance tax is unfair. You're right that this government wastes the tax revenues it receives. However, all the commentary I've seen about the raising of the inheritance tax thresholds seems to have ignored the fact that this tax redistributes some wealth from the wealthy to the less well off. The only person I've seen point this out since the Conservatives, then Labour, made the relevant announcements was Michael Portillo on This Week last week.
By raising inheritance tax thresholds the burden of taxation is being shifted away from the wealthy (in particular, those who inherited a £500,000 house that their parents bought for £10,000 and who did absolutely nothing to earn that) and onto the income earning part of the population (i.e. those that are actively contributing to the economy by working and might actually like to buy that £500,000 house but are being thwarted by having to pay so much income tax and national insurance).
If the government are going to raise the inheritance tax thresholds by so much then they should also be raising income tax thresholds by the same proportion. Of course they aren't really interested in fairness, just the votes of Daily Mail readers, so that won't happen.