Monday, Jun 21, 2010
CGT on second homes at 50%
Guardian: Budget: Osborne targets banks and property investors
Surprisingly thoughtful and progressive?
Posted by another alan @ 01:36 PM (3385 views) Add Comment
22 Comments
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1. Alan Lubin said...
Oh yes. Finally the 'parasite tax' looks like its really going to happen.
2. doomwatch said...
Will the VIs will ensure this will fail to get through Parliament ?
3. simon68 said...
Osborne is clever to impose levy on banks’ assets.
UK is having a multiple 6 for Bank Credit to GDP versus the US multiple of 3.3
UK GDP is £1,455 billion so the total banks’ lending would be £8,730 billion, suppose 1% levy on this is equated to £87.3 billions.
4. doomwatch said...
Alan @1. Yes the [potential] increase in CGT will deter the parasites, but yet again we have a tax that punishes
the majority [who are not rich parsites] to punish the few.
Personally, I'd like to have seen CGT imposed on foreign investors and non doms, but I guess George's friends
with yachts moored in Monaco wouldn't like that.
5. another alan said...
I think that we need to use the phrase 'parasite tax' all the while in reference to this, especially when commenting on Daily Mail/Telegraph VI articles etc.
6. inbreda said...
@4 doomwatch - are you implying that a tax on second homes punishes the majority? I think I have misunderstood.
7. mark wadsworth said...
What is this obsession with dreaming up new taxes for banks?
Wouldn't it be far more important to first make them repay all the £300 billion bail out loans (special liquidity scheme, blah blah blah) and phase out all the other implicit subsidies?
8. pelethar said...
I still don't believe he is going to impose CGT in line with income tax in a way which will hit most BTL investors. This article alludes to a possible exemption (or significant relief) for business assets; this could enable most multi-property landlords to avoid or reduce the tax hit, and would give the others an avenue to do so. I think there will be a material "but..." in any CGT change. But I am hoping I'm proved wrong.
9. Keef319 said...
"The buy-to-let market has been criticised for pricing first-time buyers out of the market but the industry says it provides affordable accommodation at a time of acute shortage."
Or how about, if it wasn't for BTL, there wouldn't be an acute shortage, and FTBers wouldn't be priced out of the market as houses would still be affordable!!
10. drewster said...
How on earth can the Guardian claim that Osborne is targeting property investors specifically? First of all, all assets will be caught by a rise in CGT, not just property. Secondly, you don't have to pay the tax if you don't sell the property. Thirdly, the CGT rate was 40% up until 2007 yet we still had a massive house price boom, and nobody complained that the Labour government was "targeting property investors".
I'm afraid the Guardian have completely fallen for the homeowner-ist propaganda.
11. doomwatch said...
Imbreda, it is entirely possible for HMRC to view a property as a "second" home even if
you only own 1 property but maybe have to rent another place somewhere else if you
work away. So you only OWN ONE property but still get shafted by the parasite tax. Fair society
Mr Cameron ? Only if you are a nom Dom or your rich pals have their properties protected
by off shore vehicles. Tw ats
12. doomwatch said...
Imbreda, it is entirely possible for HMRC to view a property as a "second" home even if
you only own 1 property but maybe have to rent another place somewhere else if you
work away. So you only OWN ONE property but still get shafted by the parasite tax. Fair society
Mr Cameron ? Only if you are a nom Dom or your rich pals have their properties protected
by off shore vehicles. Tw ats
13. it_is_going_with_a_bang said...
The example of someone renting out their home and then renting elsewhere is statistically far too small to consider an issue.
More to the point - the Inland Revenue have in the past added mechanisms which reduce the tax payable based on the amount of time spent living in the property compared to renting it out. In the past these methods have vastly reduced the amount of tax any such unfortunate person may find themselves paying.
In fact I did exactly that and paid no tax whatsoever at the point of sale in Aug 2007. I would like to think that there are a few safeguards in there for single home ownership - lets just wait and see.
Also as Drewster has already pointed out this quite rightly brings the system somewhere close to back to where it was before the Labour party tried to bribe an entire property addicted country with an unnecessary change in Tax.
As said before on previous posts - the "serial landlords" that have refinanced their portfolios to 80% over the last few years and max'd out will now have one hell of a headache to deal with. They cannot sell property as they have already re-financed/spent the profit. Having budgeted for 18% they now face 40% tax. It is a tax time bomb for some - add into that a " possible" interest rate rise. Interesting times ahead.
14. timmy t said...
From the article..."The buy-to-let market has been criticised for pricing first-time buyers out of the market but the industry says it provides affordable accommodation at a time of acute shortage."
Meanwhile, the rest of the population can see that the only reason there is an acute shortage is because of the buy-to-let market, without which, property would be affordable to buy, not just to rent!
15. tom101 said...
Looks like a tax trap. CGT to 50% then Merv raises interest rate....forcing sales....
16. tyrellcorporation said...
Flippin' eck Doomwatch will nothing please you?!? This is a massive step in the right direction, something Labour would never have done and you whinge about it straight away. Talk about dogma. You whine about non-doms, how many UK non-doms are there? maybe 100,000, taxing these guys will hardly scratch the surface of the UKs debt mountain. I'll reserve judgement fully until I hear the detail today but I think so far Osborne sounds serious about deflating the housing bubble and creating a more level playing field.
17. doomwatch said...
cretin @tyrellcorporation. Suprise suprise, your pal Georgie has brought CGT in straight away [as opposed to all other proposals]. I suspect, as I'm a cynical whinger, that this is clearly to prevent the crash as parasites dump their assets.
Hardly progressive.
18. inbreda said...
@17 doomwatch - you are losing me again. Surely the fact that he has bought in CGT as of midnight is to prevent all the parasites from offloading before the tax is introduced? Really - is it the time of the month?
19. Shawkie said...
Has nobody else noticed that the higher rate of CGT only applies to those who already pay higher rate income tax? I wouldn't mind betting that there are a lot of people making a fortune in capital gains (which don't count towards income) that only pay standard rate income tax.
20. tyrellcorporation said...
cretin [ˈkrɛtɪn]
n
1. (Medicine / Pathology) a person afflicted with cretinism: a mentally retarded dwarf with wide-set eyes, a broad flat nose, and protruding tongue
LOL, my tongue doesn't stick out at all!
Go drink some more Super Tennants Doomy and find a nice park to relax in.
21. doomwatch said...
tyrellcorporation @19. The fact that you had to look it up validates the usage.
Mines a White Lightening.
22. doomwatch said...
inbreda @18. I had assumed that "we" are interested in a house price crash. George has simultaneously a. immediately sucked
in more CGT and b. prevented assets been dumped onto the market beofre the new tax year
ergo NO CRASH ergo NOT WHAT WE WANT.
You keeping up now lad, or are you a Poxtons troll ?