House prices rose 7.3% this year, average now almost £250k

[HACO]

That’s presuming that good public transport links exist between where you are and where you want to be. The other consideration is how long public transport takes to get somewhere if you have to change buses/tube lines. I can think of a dozen retail parks I used to visit that were 5-10 minutes in my car that would take an hour to reach by bus/tube and then I’d be limited to what I could carry on the return trip. Good luck transporting a family’s weekly shop on the bus or the tube.

The future of shopping is online, we can't fight that trend, we should embrace it.

As for public transport, it can be better (and cheaper) for sure.

Also holidays, if we want to re-introduce holidays in the UK rather than abroad then the need for cars will increase not decrease.

Yeah, but you don't need to own a car to drive a car for holidays. There will always be need for cars, just less and less need to own one if you live in a major urban area.

So are you going to just do shopping online then?

You may as well just convert all retail space into homes then because the majority of stuff requires a vehicle to bring it home unless you want to do daily trips and bring what you can carry at a time.

Especially if you have kids, etc.

Pretty much yeah. Future of shopping is online and retail is dead. That's a global trend and you're not going to reverse it. Every year a lot of retail space is turned into service centres, office space or residential.

Cities could be much more urbanised, London included. It’s surprising how many parking spaces can be fitted underground.

Precisely.

 

[Psycho Sonny]

Cities could be much more urbanised, London included. It’s surprising how many parking spaces can be fitted underground.

I know a place that tried this and it's ended up costing them millions trying to fix.

Basically they dug underground and made a 2-3 storey car park. Problem is water is leaking from somewhere and they cannot figure out where from.

They are now having to pump water out the car park and half the car park is unusable.

Had they built upwards they wouldn't have had this issue. Going underground has all sorts of hidden issues waiting to unfold.

 

[Semple]

That would mean for example my council take going up by something like 5x per month lol.

You'd also need a way of constantly revaluing houses.. it's a total non starter.

Also massively regressive, you'd have people being forced out of areas through gentrification because they couldn't afford the property tax despite the fact they'd perhaps lived there for generations.

If it was basically replacing council tax then I guess fine and it can start to diverge but it's no panacea.

I like the idea, but you make a very valid point.

We've just bought a newish house in a popular/wealthy area. If we'd purchased in 2012 when they were built, they've increased in price by 44% in 8 years.

The area has only become sought after from about 10-15 years ago, when it was considered a bit of a rough area. A lot of the elderly people who live on our road have lived here for a good 30+ years and would likely have purchased their houses on what would be considered as low-paid jobs. Simply put, if they were 30 years younger and doing the same job they'd never be able to afford the property. The value of the properties will have outstripped their potential lifetime earnings, and a tax on the property would simply make the houses unaffordable for them.

 

[413x]

A property tax is fair. It's better than stamp duty as it allows people to move around easier.

It also might hinder the 'lucky' ones who can buy a whopping house just because of inheritance. If you don't have the job to afford the property tax you might have to be a bit more modest.

I would expect a assets tax to hit me equally as what I'm paying now.

Really, if it could be properly administered I think it's a great idea.


The big 'but' is changing values and modifications etc.


One thing is for sure. New tax has to come from somewhere soon. As total tax income is falling at a time when national debt has ballooned.

They don't have many options

 

[HACO]

I like the idea, but you make a very valid point.

We've just bought a newish house in a popular/wealthy area. If we'd purchased in 2012 when they were built, they've increased in price by 44% in 8 years.

The area has only become sought after from about 10-15 years ago, when it was considered a bit of a rough area. A lot of the elderly people who live on our road have lived here for a good 30+ years and would likely have purchased their houses on what would be considered as low-paid jobs. Simply put, if they were 30 years younger and doing the same job they'd never be able to afford the property. The value of the properties will have outstripped their potential lifetime earnings, and a tax on the property would simply make the houses unaffordable for them.

A property tax is usually cited as an incentive to get pensioners and older people to downsize and move out of the heavily sought after areas such as London or other highly urbanised locations, making those houses available for younger people who want to raise families or work nearby.

That's a good thing and by design.

A property tax is fair. It's better than stamp duty as it allows people to move around easier.

It also might hinder the 'lucky' ones who can buy a whopping house just because of inheritance. If you don't have the job to afford the property tax you might have to be a bit more modest.

I would expect a assets tax to hit me equally as what I'm paying now.

Really, if it could be properly administered I think it's a great idea.


The big 'but' is changing values and modifications etc.


One thing is for sure. New tax has to come from somewhere soon. As total tax income is falling at a time when national debt has ballooned.

They don't have many options

Wealth is the only thing we don't tax in this country, and we should.

It's funny that in this country someone with £25k net worth and £70k income pays twice as much tax as someone with £1 million net worth and £40k income.

 

[413x]

A property tax is usually cited as an incentive to get pensioners and older people to downsize and move out of the heavily sought after areas such as London or other highly urbanised locations, making those houses available for younger people who want to raise families or work nearby.

That's a good thing and by design.



Wealth is the only thing we don't tax in this country, and we should.

It's funny that in this country someone with £25k net worth and £70k income pays twice as much tax as someone with £1 million net worth and £40k income.

It's ridiculous. We need to increase taxes. This is one of the few fair options.

 

[potatolord]

Just increase taxes for those living in London.

It's the fairest way.

 

[dowie]

Wealth is the only thing we don't tax in this country, and we should.

It's funny that in this country someone with £25k net worth and £70k income pays twice as much tax as someone with £1 million net worth and £40k income.

Someone with a 70k income pays more income tax than someone with a 40k income... that's just how taxation works. The amount of assets they have is irrelevant to income tax.

Someone who earns 100k a year and made 100k in gains on their stock portfolio pays less in GCT than someone who earns 50k a year and made 200k in gains on their stock portfolio.

Someone with £1million net worth has likely paid a lot of tax already to get to that position (save for gambling winnings)... perhaps in time, the person earning 70k might get there and later when they become a pensioner with a lower income they won't pay much income tax.

If they still have substantial assets when they die then their estate will be liable for IHT too.

 

[HACO]

Someone with a 70k income pays more income tax than someone with a 40k income... that's just how taxation works. The amount of assets they have is irrelevant to income tax.

In this country, yes that's how it works. Not everywhere. E.g. Sweden, France, Italy, Norway, Switzerland, etc have different forms of wealth taxes. Add in property taxes and then US, Australia, Japan, Canada, Ireland, etc, they all have them. You know, these communist countries who don't know how taxation works!

In fact, UK is the only OECD country that doesn't have some form of an annual property tax for the property owner. THE ONLY ONE. Maybe we're the only one who understand how taxation works, and everyone else is mistaken.

Someone with £1million net worth has likely paid a lot of tax already to get to that position (save for gambling winnings)... perhaps in time, the person earning 70k might get there and later when they become a pensioner with a lower income they won't pay much income tax.

Not if it's property price appreciation, for which they haven't worked at all, and pay zero taxes (exemption from capital gains tax).

If they still have substantial assets when they die then their estate will be liable for IHT too.

IHT is not a replacement for wealth tax. All the countries that have wealth and property tax, also have IHT tax on top of that.

We're really unique that we don't tax wealth. Every other OECD country does it.

 

[krooton]

Not if it's property price appreciation, for which they haven't worked at all, and pay zero taxes (exemption from capital gains tax).

But surely that is only realised if the property is sold.

So if someone scrimps and saves to get on the ladder with a £150k flat on a 30 year mortgage, and 3 years later the flat has doubled in value, they need to suddenly pay more tax (that they might not be able to afford)?

Or will this have a tax-free threshold as well? Will the net-worth be calculated based on the balance of debts and assets?

 

[dowie]

In this country, yes that's how it works. Not everywhere. E.g. Sweden, France, Italy, Norway, Switzerland, etc have different forms of wealth taxes. Add in property taxes and then US, Australia, Japan, Canada, Ireland, etc, they all have them. You know, these communist countries who don't know how taxation works!

I'm referring to income tax and, you're wrong - see below.

Not if it's property price appreciation, for which they haven't worked at all, and pay zero taxes (exemption from capital gains tax).

Only on a primary residence, someone with net assets of 1 million might have a second home or a stock portfolio etc.. Then they've paid tax on the income used to purchase the primary property, the transfer of the property and it will be liable to IHT too.

IHT is not a replacement for wealth tax. All the countries that have wealth and property tax, also have IHT tax on top of that.

All 4 of them? Most of them have scrapped it.

We're really unique that we don't tax wealth. Every other OECD country does it.

No we're not, the countries that are unique are those that haven't scrapped theirs:

https://www.businessinsider.com/4-e...-norway-switzerland-belgium-2019-11?r=US&IR=T

Back in 1990, around a dozen European countries had a wealth tax, according to the Organization for Economic Cooperation and Development. Today, only four European countries have it: Spain, Norway, Switzerland, and Belgium.

Most European governments eliminated the tax because it was problematic in design and enforcement, and France was the latest to scrap it in 2017. They often hit people with plenty of assets but little cash on hand to pay the taxman.

"They can be really difficult to administer and ensure even a moderate compliance rate," Daniel Bunn, the director of Global Projects at the nonpartisan Tax Foundation, told Business Insider of the European wealth tax experience.

He added that it became difficult for governments to justify the high administrative cost of enforcement as the rich were able to move assets and capital out of the country into lower-taxed jurisdictions, often within Europe.

so you're proposing a tax that most countries who had it have gotten rid of because it was a bit of a farce - difficult to administer and hit people who couldn't easily pay it.

 

[413x]

Administration would be impossible.
You'd never be able to an accurate valuation. Probably biggest issue

 

[HACO]

But surely that is only realised if the property is sold.

So if someone scrimps and saves to get on the ladder with a £150k flat on a 30 year mortgage, and 3 years later the flat has doubled in value, they need to suddenly pay more tax (that they might not be able to afford)?

Or will this have a tax-free threshold as well? Will the net-worth be calculated based on the balance of debts and assets?

They should pay more tax in that instance, because they are now significantly wealthier.

If you benefit from 100% asset appreciation, then you should also be liable for its taxes.

I'm referring to income tax and, you're wrong - see below.
Only on a primary residence, someone with net assets of 1 million might have a second home or a stock portfolio etc.. Then they've paid tax on the income used to purchase the primary property, the transfer of the property and it will be liable to IHT too.



All 4 of them? Most of them have scrapped it.



No we're not, the countries that are unique are those that haven't scrapped theirs:

https://www.businessinsider.com/4-e...-norway-switzerland-belgium-2019-11?r=US&IR=T


so you're proposing a tax that most countries who had it have gotten rid of because it was a bit of a farce - difficult to administer and hit people who couldn't easily pay it.

While it's true that some countries crapped their pure WEALTH tax, you ignored the PROPERTY tax part of it, which is the main subject here. All OECD countries have PROPERTY TAXES that the owner pays. EVERY SINGLE ONE OF THEM, except the UK.

Or did you seriously claim that these countries have scrapped their PROPERTY taxes as well? If so, you're just wrong.

Administration would be impossible.
You'd never be able to an accurate valuation. Probably biggest issue

Every other OECD country has property tax based on the value of the property that the owner pays. If they all can manage administering it, so can we.

I personally don't have confidence that this Tory government will deliver a property tax, but we shall see in the March budget.

 

[krooton]

They should pay more tax in that instance, because they are now significantly wealthier.

If you benefit from 100% asset appreciation, then you should also be liable for its taxes.

But that benefit only happens IF they sell.

So the property goes up in value due to gentrification of the area, suddenly they have to pay tax on this 'gain'.

But then the property market crashes, and they have to sell their flat back at it's original price.

They have now paid extra tax for no logical reason, it is impossible to administer such a process fairly, which is why so many countries scrapped it.

Imagine having to sell your property because it went up in value and you can no longer afford the associated outgoings, that crazy. Some people have just managed to get on the property ladder based on the current system, then you slap an extra tax on them that they can't afford.

"What's that, you've cleared you mortgage? Well, not really, as you will continue pay tax (basically interest) on your house."

 

[dod]

That's a good thing and by design.
.

So are you advocating that a pensioner should be taxed out of their home and forced to relocate potentially miles from their family and friends through no fault of their own?

 

[HACO]

But that benefit only happens IF they sell.

So the property goes up in value due to gentrification of the area, suddenly they have to pay tax on this 'gain'.

But then the property market crashes, and they have to sell their flat back at it's original price.

They have now paid extra tax for no logical reason, it is impossible to administer such a process fairly, which is why so many countries scrapped it.

Imagine having to sell your property because it went up in value and you can no longer afford the associated outgoings, that crazy. Some people have just managed to get on the property ladder based on the current system, then you slap an extra tax on them that they can't afford.

"What's that, you've cleared you mortgage? Well, not really, as you will continue pay tax (basically interest) on your house."

Nothing happens that fast. A 0.48% annual property tax (the proposal) is not going to crash the market or force anyone to sell. You can easily borrow against your property at almost no interest to pay that.

Everywhere in the OECD countries, people pay annual property taxes. Their world doesn't end, their countries don't collapse and they don't have to sell their houses.

So are you advocating that a pensioner should be taxed out of their home and forced to relocate potentially miles from their family and friends through no fault of their own?

Absolutely. 100%. If you have an asset that's worth, let's say £1 million, and need to pay an annual tax of £5000 as a result, I'm not going to sit here and pretend like you need a tax break.

Either borrow against that £1 million to pay your taxes, or if you don't want to, sell up and become super cash rich.

Poor pensioners, the richest demographics in the country whose wealth in 2020 increased by 20% alone while every other demographic got poorer (to protect those pensioners!). Imagine being so heartless to ask them to pay 0.5% tax on their properties.

 

[dod]

Absolutely. 100%..

Should we also have a higher tax on saved income then? By definition if it’s saved it’s not actually required, let others benefit?

and at what point would the wealth tax kick in?

 

[Deleted User 298457]

HACO, now you have done house prices and council tax, can you move onto childcare? I am going to have to pay £1500/mo for 4 days a week

 

[krooton]

Nothing happens that fast. A 0.48% annual property tax (the proposal) is not going to crash the market or force anyone to sell. You can easily borrow against your property at almost no interest to pay that.

Everywhere in the OECD countries, people pay annual property taxes. Their world doesn't end, their countries don't collapse and they don't have to sell their houses.

Nah, screw that, I was with you on controlling people hoovering up properties, and BTL magnates and foreign investors, but we already paid £30k in stamp duty when we bought our house 2 years ago, pay inflated council tax even though we get reduced council services, have to pay the estate management company £60 a month, and now with your proposal we need to stump up another £250 a month just because?

You definitely seem to be bitter and twisted over home-ownership.

 

[Bald-Eagle22]

Build houses where?

There is no point building houses 300 miles away if haco needs a house in the centre of London.

Building houses won't affect house prices. Because those houses won't be wanted by anyone other than those in the local area.

It's not as if everyone in London is going to start buying houses in Wales. Therefore London prices remain the same.

The real solution is fixing the wage issue. To fix that you need to fix the economy. To fix the economy you need a long standing competent government.

Whilst I don’t disagree there has been wage deflation I’m not sure until there is enough supply of housing stock this is the answer - it would only fuel the fire so to speak .

Don’t agree with you about London or any major city for that matter. Ive lived and worked in London all my life and with the correct rail links and infrastructure built you could build tens of thousands of houses in and around London . The M25 has nothing but countryside all along it.

Just create the supply .