House prices rose 7.3% this year, average now almost £250k
- Thread starter HACO
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If you go by some people's logic in this thread, you should be ashamed of yourself for buying the first two places when you really should've been able to buy the 3-bed house to begin with because it was your end goal....
My job is such and I'm entitled to this.
Re the size of any potential property tax, does anyone know how other taxes compare in countries that have it? For example I think that while Switzerland and the USA have what on the face of it seems like a punitive-to-UK-eyes property tax, income taxes are much lower than the UK in many cantons/states so the overall tax burden might not be that different to us just that wealth rather than income contributes more.
If they are identical then presumably they'll be the same value and therefor the calculation for property tax would be the same. Why would you think otherwise?
Oh for sure and I agree but there's been some nonsense chat that the market should've allowed you to buy the 3-bed in the first place
One is an asset, the other is mostly debt. You're being taxed on debt
Both are assets and are valued the same so the tax is the same. How you purchase the asset doesn't change it's value.
TBH,i think SDLT should be scrapped because it reduces mobility,but ultimately you are conflating 2 different taxes. even if SDLT was maintained, it doesn't impact property taxes and is only a problem when you chop and change houses regularly. That cost exists regardless of a property tax.
You also aren't forced to downsize. What happens is before purchasing a house you take into account the costs of ownership and buy within budget. That typically means not buying a house with many more bedrooms than you need. In that respect it identicsl to a mortgage, you find out your monthly costs and derive an upper limit on affordability.
The amount of disposable income again is a function of the value in of the house you buy, the same as with a mortgage. If you buy a smaller cheaper property then you won't have an issue
What do you expect, the government comes along and says "Oh, you've already made your calculations? You don't need to bother paying any tax then!"
Well, the endgame of all of this is that you don't have to slave away for your whole life just to have a roof over your head. But beyond that, yes.. you live, you look after yourself and your family whilst they need your help and you're alive then you die and you're dead so wipe the slate.
I mean, god forbid we get to a situation where life isn't simply about working. The dream was that increased automation etc would free people up to have to work LESS.
Imagine a world where because your house cost less than most of your wages and you had to rely on is to pay for your care and couldn't pile up wealth to give to your kids that you were motivated to work less and be more present in your own life.
Someone will be along to call me a socialist soon but I thought the dream of automation and progress was to free everyone from having to work so much, not doom half the population to work as amazon drivers to serve those of us with jobs that can't be automated away whilst being paid too little to eat.
What do you expect, the government comes along and says "Oh, you've already made your calculations? You don't need to bother paying any tax then!"
No, like with pension age changes they get phased in over a long time so people/the market has time to adjust.
That's what would effectively happen. It would be set at a current level where it would be similar to the council tax it replaced but as property prices increase then obviously the tax based on their value would increase too.
If it became law, everyone would be required to pay. Even those who have "made their calculation" before it was introduced.
It is difficult to compare directly. You have to take into account local, state/cantonal and federal taxes, aswell as social security taxes, tax free allowances, and where the different changes in marginaltax rates kick in.
The tax free allowance is far lower in the US and CH than the UK so even if the top marginal rate is lower, the personal allowance provides a 40/45% tax cut fpr ypur first 10k or whatever it is.
in the Uk NI drops to 2%, but it is like 5-6% in CH and USA, and that starts from your first penny.
Even after taxes, you have to consider purchasing parity snd living costs. Day care is literally twice the price in CH compared to London. You then have to buy health insurance on top. In the US if ypur kids want to go to Uni then you fork out a 6-figure sum.
My overall impression is taxes and equivalents in the UK for most people are lower than the US.
Switzerland might have slightly lower taxes, but the additional living costs more than cancel that out. The property prices are also far higher, so that 1.5%
property tax is a lot.
This is what surprises many peole in the UK, but it is a low tax country. That is why the services tend to suck.
What do you expect, the government comes along and says "Oh, you've already made your calculations? You don't need to bother paying any tax then!"
Property owners in London and SE will be getting slaughtered.
I've had a little look at numbers.
If I pay into my private pension at rate I do now.
And my house rises with inflation
And I pay it off by retirement.
I think I could retire on 30k. Without releasing equity if the state pension stays same.
But 30 won't be worth much then. So even saving a lot. On an above average wage I'll barely have enough to keep up with any unexpected events.
Let's say state pension drops away rapidly. That 30k will also come down rapidly.
I'm not a low earner. That's the scary bit about the future. I'll manage. But it won't be like my parents retirement. Off on cruises etc.
It's a time bomb
Get a BTL
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