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Dishy Rishi reportedly considering abolishing stamp duty and council tax and replacing them with an annual levy on all properties


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24 minutes ago, TheCountOfNowhere said:

2% on a 500K barrat home for people already up to their necks in debt, that'll be £10,000 per year they need to find.

Prices would come down pretty sharpish...hence why they wont do it.

I agree, It won't happen. Imagine all those who have inherited 300k, bought a 500k house and really cannot afford 10k extra a year.

Most people who own a house, which has a high price tag, are not wealthy or high earners. Their house is there wealth.

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On the face of it, it's a great idea. 0.5% would make mean the median house pays less, double that to 1% for non-resident owners.

I don't think it'll happen though. House prices have turned most into 'I'm alright Jack', self-centred people. 

Inevitably the £2.5k-5k charge London properties will see a load of people complaining that the tax is an impediment to moving and properties being sold - pretty much like the same complaints about the stamp duty. There are probably quite a few people who were equity rich, either from gains or staying put, but whose levels of income are not commensurate with the higher charges.

If given the option that the solution that prices should just come down to levels that would make this charge acceptable, for most it'll be '****** that, I'd rather pay council tax'. 

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23 minutes ago, markyh said:

Not possible, house prices would collapse. I currently pay £2100 p/a council tax.  I have payed about £20k Stamp duty in my lifetime for 3 house purchase since 1996. 

My house is currently worth £600k.  2% would mean £12k p/a property tax, £1k p/m, nearly 5 x the current annual tax. Out of a 5k pcm net income.  20% of a families net income as property tax.  Plus I would pay more than a lifetime of stamp duty and 2 years council tax (£24k) in just 2 years (£24k)

Basically all annual holidays, foreign or domestic would go bust, no one could take them, eating out , takeaways, no more, pretty much all discrectionary spending would disappear. 

The economy would collapse, or Income tax would have to be cut to 5% or something. 

To me paying only £2100 pa on a half million pound house seemed a bit low. I based that on the idea that a 50k heap of garbage in Sunderland probably has a council tax that is similar. To check if I was right I googled lowest council tax. The results are a bit of a revelation.

Lowest council tax in England is Westminster. Average price of a terrace in Westminster is £3,116,862.

Next lowest is Wandsworth, £450 per year. Then Hammersmith and Fullham. Kensington and Chelsea is five.

All of the top ten lowest tax rates are in London. In the places where the wealthiest live.

https://www.mylondon.news/news/zone-1-news/people-westminster-pay-less-council-17783987

To me it seems incredibly fair and well reasoned. The wealthiest need to stimulate demand for things like private jets, luxury cars, Champaign yaughts and cocain. Therefore they ought to pay less tax. It's for our own good!

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12 minutes ago, Speed1987 said:

I agree, It won't happen. Imagine all those who have inherited 300k, bought a 500k house and really cannot afford 10k extra a year.

Most people who own a house, which has a high price tag, are not wealthy or high earners. Their house is there wealth.

Aye there will be a fair few pensioners out there with expensive properties, some even on pension credit. 

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26 minutes ago, Speed1987 said:

I agree, It won't happen. Imagine all those who have inherited 300k, bought a 500k house and really cannot afford 10k extra a year.

Most people who own a house, which has a high price tag, are not wealthy or high earners. Their house is there wealth.

It won't of course be 2% a year on a £500k house - utter nonsense!

It is replacing council tax - which would be barely £2,000 a year at most on a £500k house. And a bit extra for stamp duty losses. 

The big hit will be on prime central London - Kensington and Chelsea and Westminster have more Band H properties than the whole of the north (if you exclude a couple of posh bits of Cheshire and Harrogate)! And Band H has a cap - so those £100m mansions in Knightsbridge and Belgravia will pay a lot more than the £1300 a year council tax they do now to Westminster council (which charges barely half the average English council tax level) - so someone in that £500k house may even pay less than they do in council tax now!

Edited by MARTINX9
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15 minutes ago, Speed1987 said:

I agree, It won't happen. Imagine all those who have inherited 300k, bought a 500k house and really cannot afford 10k extra a year.

Most people who own a house, which has a high price tag, are not wealthy or high earners. Their house is there wealth.

Surely the market would fix this though? They would be incentivised to sell and the new owner would presumably buy at what they can afford +tax. It basically means all those lottery size wins in the property market of the last 20 years go poof. Painful for those who thought they had won and banked on it but great for society as a whole - market transactions would rocket, people could move for work, better allocation of property (granny living alone in a 5 bed house no more) etc.

 

I’m 50/50 on this. Wonder how they would ‘determine’ the value of your house and will we be arguing about it in 30 years time, like we do now about property prices in 1991 relating to the banding of a flat built in 2020.

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56 minutes ago, Warlord said:

In the US they pay that sort of property tax 1-2% depending where you are.

They always complain about it 

But they do pay less tax overall federally and locally  than us .

Yeah, that's the thing, in the UK they'd just keep all the taxes high.

You know the nursery rhyme Bah Bah Black sheep is effectively about the establishment taxing people:

 

Baa Baa Black Sheep is about the medieval wool tax, imposed in the 13th Century by King Edward I. Under the new rules, a third of the cost of a sack of wool went to him, another went to the church and the last to the farmer.

 

This is the case still, people dont realise but with all the hidden takes many are paying 2/3 of their income in taxes.

It's the bankers now of course in stead of the church, but they leave just enough for people be able to afford to live and take the rest.

 

This will not change until Britain goes through a lot of pain.

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3 minutes ago, TheCountOfNowhere said:

Yeah, that's the thing, in the UK they'd just keep all the taxes high.

You know the nursery rhyme Bah Bah Black sheep is effectively about the establishment taxing people:

 

Baa Baa Black Sheep is about the medieval wool tax, imposed in the 13th Century by King Edward I. Under the new rules, a third of the cost of a sack of wool went to him, another went to the church and the last to the farmer.

 

This is the case still, people dont realise but with all the hidden takes many are paying 2/3 of their income in taxes.

It's the bankers now of course in stead of the church, but they leave just enough for people be able to afford to live and take the rest.

 

This will not change until Britain goes through a lot of pain.

Also the house prices are more sensible there despite the boom/bust cycle. The 500k Baratm would buy a mansion in most states especially southern ones.

 

Edited by Warlord
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2 minutes ago, TheCountOfNowhere said:

Yeah, that's the thing, in the UK they'd just keep all the taxes high.

You know the nursery rhyme Bah Bah Black sheep is effectively about the establishment taxing people:

 

Baa Baa Black Sheep is about the medieval wool tax, imposed in the 13th Century by King Edward I. Under the new rules, a third of the cost of a sack of wool went to him, another went to the church and the last to the farmer.

 

This is the case still, people dont realise but with all the hidden takes many are paying 2/3 of their income in taxes.

It's the bankers now of course in stead of the church, but they leave just enough for people be able to afford to live and take the rest.

 

This will not change until Britain goes through a lot of pain.

Not only is there high general taxation but there’s the indirect value theft from your earnings/savings as they print money to capture a good % of your value.

very hard to quantify, perhaps is we worked out how much you earned to start with, and then how much you take home, then the value of that take home 6 months later.

you would need to price everything in assets as consumables like apples are linked to what people can afford. Like land

how much land can you buy before take and how much land can you buy after take and 6 months of inflation. 

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1 hour ago, Warlord said:

In the US they pay that sort of property tax 1-2% depending where you are.

They always complain about it 

But they do pay less tax overall federally and locally  than us .

Hence why people move States depending on their personal circumstance. In Florida it can be the top end of that or higher depending on county but no  income tax. The downside is whilst your earning ok but in the States many people of pension age have to move far away from their families to afford property taxes on a fixed income - States effectively compete for residents - hence the popularity of places considered boon dock or back and beyond such as Alabama or Nashville - its not perfect by a long way

Personally I would set a few more higher bands up first and see how much that rakes in 

When you add in property tax, local taxes, Medical insurance (which might as well be a tax) in the attractive parts of the US the tax differential isn't as great as people believe 

 

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3 minutes ago, GregBowman said:

Hence why people move States depending on their personal circumstance. In Florida it can be the top end of that or higher depending on county but no  income tax. The downside is whilst your earning ok but in the States many people of pension age have to move far away from their families to afford property taxes on a fixed income - States effectively compete for residents - hence the popularity of places considered boon dock or back and beyond such as Alabama or Nashville - its not perfect by a long way

Personally I would set a few more higher bands up first and see how much that rakes in 

When you add in property tax, local taxes, Medical insurance (which might as well be a tax) in the attractive parts of the US the tax differential isn't as great as people believe 

 

Yes it feels like in the US you get taxed by other things than the government. Bills are hefty.

But nonetheless their taxation structure encourages more people to get an higher income and think less of the property tax. 

In the UK you have 0% property tax (council tax is different) and a marginal income tax rate at 45%.

In the US it varies, Texas you have 1.69% property tax and 35% federal marginal income tax

So you can't just sit on your asset, and you can earn more money to compensate. 

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18 minutes ago, mrlegend123 said:

How would the property tax affect renters? Would landlords just add the tax to rents? 

Will we see a boom in BTL due to no stamp duty?

Yes, they would try to charge the renters. But let's not fool ourselves, the renters are being charged the maximum they can afford. Mortgage costs went down, and rents still went up. So I expect this to slightly increase the LLs' costs

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1 hour ago, Freki said:

Yes it feels like in the US you get taxed by other things than the government. Bills are hefty.

But nonetheless their taxation structure encourages more people to get an higher income and think less of the property tax. 

In the UK you have 0% property tax (council tax is different) and a marginal income tax rate at 45%.

In the US it varies, Texas you have 1.69% property tax and 35% federal marginal income tax

So you can't just sit on your asset, and you can earn more money to compensate. 

Totally agree - I am building quite a family out there because my Son married a US girl and my cousin married into a family with some Columbian relatives who are in the US and I am speaking to all of them - and until recently would go over and see them

It encourages self reliance and striving and diverts money to real enterprise. The downside whatever their background they seem to have a dog eat dog mentality which I find quite ugly even though I am to the centre right on my political views. They cannot get the macro view that globalisation really has changed the life chances for millions and it isn't just a case of working hard and you can have the American dream

 

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25 minutes ago, Freki said:

Yes, they would try to charge the renters. But let's not fool ourselves, the renters are being charged the maximum they can afford. Mortgage costs went down, and rents still went up. So I expect this to slightly increase the LLs' costs

renters pay rent and pay council tax
they wont have to pay council tax, that cost goes to landlords

But the rent will fill that gap quickly and the tenants will pay it indirectly.

Does not make a difference to tenants, bar maybe the time between the introduction and their contract changing.

And landlords will the chance to update contracts to get an increase in rent above and beyond council tax. 

Saves the government having to chase council tax from renters, and its puts even more risk on landlords! 

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13 hours ago, jimmy2x3 said:

i thought london mostly voted labour? sames as oxford and cambridge and the home counties. infact if i looked at a map of the wealthiest areas i would be practically looking at the map of the labour voting areas. 

You need to revise your idea of who holds the wealth, everytime i turn on the news there is some mega rich lefty labour suporter extoling labours virtues. that old tory wealth thing is quite a small group compared to the wealthy labour supporters these days. heck a big chunk of conservative voters are the working classes as was seen by the red wall collapsing in the ild labour heartlands at the last election. 

sometimes i think socialists should look closer to home to find out who owns all the wealth instead of shouting the rich tory mantra thats just so 1980s socialist worker propaganda. the bogeyman has changed its multi millionaires on question time telling you to vote labour. 

In many cases yes.

Outside of London you want a great job it is often local public sector/NHS.

In my area of NR2 you have now 400K + 3 bed terraces listed.  You swap the London NHS/Council/Education job and move to Norwich sell the flat and take a huge mortgage price out the locals and then complain that Tories are evil and hate the poor.

Our MP is the delightfully Clive "Get on your knees bitch" Lewis whom whilst calling people racist forgets he presents a constituency that is whiter than Daz ultra whom for all their faults are obviously not that racist.

The only thing that would piss my neighbours off more than a vote leave board would be a property tax.

 

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3 hours ago, Freki said:

Yes it feels like in the US you get taxed by other things than the government. Bills are hefty.

But nonetheless their taxation structure encourages more people to get an higher income and think less of the property tax. 

In the UK you have 0% property tax (council tax is different) and a marginal income tax rate at 45%.

In the US it varies, Texas you have 1.69% property tax and 35% federal marginal income tax

So you can't just sit on your asset, and you can earn more money to compensate. 

https://www.businessinsider.com/millionaires-billionaires-living-in-affordable-homes-warren-buffett-mark-zuckerberg-2019-2?r=US&IR=T

At least you can choose.

I find the US market much more dynamic and the price adjust a lost faster.

If you have a small band A home in Norwich the charge is £1,299.31 so presumably a 150 flat or even less would pay this so near 1%.  

I have had a look and we have some horrible flats you can buy sub 90K so there you well over 1% per year.

The bands have not kept up with prices so its unfair at the bottom and too cheap at the top.

If you bought 40 million £ worth of gold and wanted storage 0.75 - 1.25 percent so why should leaving a 40 million house empty needing police and fire protection be any less?  Not to mention local infrastructure improvements.

https://www.cnbc.com/opt-in-check/?pub_referrer=%2Fid%2F43975881

Edited by Fromage Frais
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1 hour ago, Fromage Frais said:

In many cases yes.

Outside of London you want a great job it is often local public sector/NHS.

In my area of NR2 you have now 400K + 3 bed terraces listed.  You swap the London NHS/Council/Education job and move to Norwich sell the flat and take a huge mortgage price out the locals and then complain that Tories are evil and hate the poor.

Our MP is the delightfully Clive "Get on your knees bitch" Lewis whom whilst calling people racist forgets he presents a constituency that is whiter than Daz ultra whom for all their faults are obviously not that racist.

The only thing that would piss my neighbours off more than a vote leave board would be a property tax.

 

And who else would they vote for - I can't see Labour or the LDs opposing a property tax hike on richer areas (which they both supported in 2015, 2017 and 2019) if the Tories propose it assuming poorer areas get more spending and the mega rich in prime zone 1 pay a much bigger bill on their unearned gains. That wouldn't be very socialist would it!

Edited by MARTINX9
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15 hours ago, jimmy2x3 said:

i thought london mostly voted labour? sames as oxford and cambridge and the home counties. infact if i looked at a map of the wealthiest areas i would be practically looking at the map of the labour voting areas. 

You need to revise your idea of who holds the wealth, everytime i turn on the news there is some mega rich lefty labour suporter extoling labours virtues. that old tory wealth thing is quite a small group compared to the wealthy labour supporters these days. heck a big chunk of conservative voters are the working classes as was seen by the red wall collapsing in the ild labour heartlands at the last election. 

sometimes i think socialists should look closer to home to find out who owns all the wealth instead of shouting the rich tory mantra thats just so 1980s socialist worker propaganda. the bogeyman has changed its multi millionaires on question time telling you to vote labour. 

Only one constituency on Oxfordshire is Labour.

https://en.wikipedia.org/wiki/List_of_Parliamentary_constituencies_in_Oxfordshire 

Turning on the news isn't a substitute for actual data.

Socialists aren't interested in who owns the wealth only in how to redistribute it.

I would be interested to see the combined wealth of the 'quite small group of Tories' v the combined wealth of 'mega rich lefty Labour supporters'?

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5 hours ago, Biggus said:

To me paying only £2100 pa on a half million pound house seemed a bit low. I based that on the idea that a 50k heap of garbage in Sunderland probably has a council tax that is similar. To check if I was right I googled lowest council tax. The results are a bit of a revelation.

Lowest council tax in England is Westminster. Average price of a terrace in Westminster is £3,116,862.

Next lowest is Wandsworth, £450 per year. Then Hammersmith and Fullham. Kensington and Chelsea is five.

All of the top ten lowest tax rates are in London. In the places where the wealthiest live.

https://www.mylondon.news/news/zone-1-news/people-westminster-pay-less-council-17783987

To me it seems incredibly fair and well reasoned. The wealthiest need to stimulate demand for things like private jets, luxury cars, Champaign yaughts and cocain. Therefore they ought to pay less tax. It's for our own good!

I think the fact that Westminster pays the lowest council tax astounding. Thinking about it and knowing how it works and what it pays for I can see how that has evolved....but still.

Av price £3m and lowest council tax. 

I think it is this disparity (and not from my liberal leftie viewpoint but from a revenue possibility viewpoint) is something the government may try to capture in order to raise more pennies.

Something that nudges up prices across the board, doesn’t lose votes or feels a bit fair (and in any event Tory voters won’t vote Labour to avoid this....because Labour will be on board plus more) and then nudges up tax on ‘mansions’.

Maybe initially they might just add more tax bands and remove or massively increase some of the upper caps? 

 

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56 minutes ago, Pimp My Pants said:

I would be interested to see the combined wealth of the 'quite small group of Tories' v the combined wealth of 'mega rich lefty Labour supporters'?

How on earth did you arrive to this dichotomy? Who is the quite small group of Tories? Who is the 'mega rich lefty labour supporters?

https://commonslibrary.parliament.uk/general-election-2019-which-party-received-the-most-donations/

image.png.a911129639bbfb49033ce3fe51ad7962.png

The small group of tories beats the donation from the mega rich lefty by 83 to 1. What charitable act seriously.

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6 hours ago, TheCountOfNowhere said:

Yeah, that's the thing, in the UK they'd just keep all the taxes high.

You know the nursery rhyme Bah Bah Black sheep is effectively about the establishment taxing people:

 

Baa Baa Black Sheep is about the medieval wool tax, imposed in the 13th Century by King Edward I. Under the new rules, a third of the cost of a sack of wool went to him, another went to the church and the last to the farmer.

 

This is the case still, people dont realise but with all the hidden takes many are paying 2/3 of their income in taxes.

It's the bankers now of course in stead of the church, but they leave just enough for people be able to afford to live and take the rest.

 

This will not change until Britain goes through a lot of pain.

The issue is wages relative to productivity more than tax, I'd say. 

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