Lib Dems plan annual property tax levy.

dopester

For homes worth £1 million +

The plans will be unveiled by Vince Cable, the Treasury spokesman. The boldest element is an annual levy of .5 per cent on a property's value above a threshold of £1m. This would mean additional tax of £2,500 a year on a home valued at £1.5m, or £15,000 a year on a house worth £4m.

http://www.independent.co.uk/news/uk/politics/clegg-hit-the-rich-with-a-new-tax-on-big-homes-1790711.html

Ouch. What was I saying about the asset rich - cash poor baby-boomers coming toward or in retirement, who own at that higher middle to upper end, and who've enjoyed decades of HPI. Those who already have one-eye on downsizing and cashing in, who just need an extra jolt.

dopester wrote: »

Ever more of the older baby-boomers at the mid to top end will be looking to downsize.. and wanting to cash-in for their pensions. They just need a jolt. There isn't enough younger upsizing money around to support these crazy asking prices.

Whether it comes to pass under the Lib Dems or not, anyone with property will be a target for the squeeze imo, from any political party in power.

Generali

Doesn't sound like much of a money spinner to me.

It's either a gimmick or (worse) a pot-shot at the rich to bring 'em down a peg or two.

Poor.

amcluesent

Your socialists, in their heart-of-hearts, believe that property is theft. They hate property-rights as it gives people independence from the state and they can't be told what to do and threatened.

Their "solution" is to arrange taxation so that over a lifetime, they take off you the equivalent amount to the worth of the asset, so effectively they'll steal your house. It'll be £1M threshold now, then £500K, then £100K.

The Lib-Dems believe that they know far, far better than you do how to spend your money. Behind Vince is the same old rabble of knit-your-own-yoghurt, everyone-must-have-prizes, woollies.

dopester

amcluesent wrote: »

Their "solution" is to arrange taxation so that over a lifetime, they take off you the equivalent amount to the worth of the asset, so effectively they'll steal your house. It'll be £1M threshold now, then £500K, then £100K.

The Lib-Dems believe that they know far, far better than you do how to spend your money. Behind Vince is the same old rabble of knit-your-own-yoghurt, everyone-must-have-prizes, woollies.

I'm not a Lib Dem fan, so they are not my socialists. A property-tax on those tiers doesn't seem unreasonable to me.

It is an extra balancing check mechanism to only buy a more expensive home if you can truly afford it... whereas before the credit expansion alone just allowed those transacting to keep buying at ever higher prices, pushing up values of all homes.

If property-taxes on value had been in place 12 years ago, might it not have gone some way to preventing the HPI madness?

Yes the US has them.. but we've had more bubbles/crashes in house prices over the years.. and our bubble is much greater (imo).

Generali

dopester wrote: »

I'm not a Lib Dem fan, so they are not my socialists. A property-tax on those tiers doesn't seem unreasonable to me.

It is an extra balancing check mechanism to only buy a more expensive home if you can truly afford it... whereas before the credit expansion alone just allowed those transacting to keep buying at ever higher prices, pushing up values of all homes.

If property-taxes on value had been in place 12 years ago, might it not have gone some way to preventing the HPI madness?

Yes the US has them.. but we've had more bubbles/crashes in house prices over the years.. and our bubble is much greater (imo).

The French have a Wealth Tax and that didn't stop house prices being push up substantially over there in the past few years.

A perennial news story over there is about the poor little old lady having to sell the family home because outsiders with money are buying up houses and pushing up the value of homes so that she is pushed into pay the Wealth Tax and can't afford it on her War Widow pension.

macaque_2

dopester wrote: »

For homes worth £1 million +

http://www.independent.co.uk/news/uk/politics/clegg-hit-the-rich-with-a-new-tax-on-big-homes-1790711.html

Ouch. What was I saying about the asset rich - cash poor baby-boomers coming toward or in retirement, who own at that higher middle to upper end, and who've enjoyed decades of HPI. Those who already have one-eye on downsizing and cashing in, who just need an extra jolt.

Whether it comes to pass under the Lib Dems or not, anyone with property will be a target for the squeeze imo, from any political party in power.

Taxing people more for having a nice house is wrong. Taxing people for having an empty house however is a different matter. People have aquired the habit of hoarding extra homes in recent years. People buy second and third homes which they are willing to keep empty for long periods. This is a very anti social practice and well deserving of a swinging tax.

lostinrates

A lot of people out here use the spare rooms in there million pound plus house for income, via Bed and Breakfast. Its been hugely encouraged as a means of diversifiation for farmers and its a popular second or retirement income for the professional families whose children have left home.

We have weird attitudes to the sizes of home that people can build too.

Also, the homes worth a million in parts of the country can be modest (thinking of course of London)

JonnyBravo

Generali wrote: »

Doesn't sound like much of a money spinner to me.

It's either a gimmick or (worse) a pot-shot at the rich to bring 'em down a peg or two.

Poor.

Vince was on R5 this morning.

£1B raised.

Like you say..... big deal.

kabayiri

hey, its another billion off the debt.

Face it, we need the money, big time.

Once the debt is repaid it can stop ...

dopester

kabayiri wrote: »

hey, its another billion off the debt.

Face it, we need the money, big time.

Once the debt is repaid it can stop ...

It was a possible cascading effect it might have on values which interested me the most. Drawing this out is going to prove more damaging in the long run, with the young suffering.. priced out with mega-valued homes at all levels.. where banks going under, or being supported by taxpayer, and mortgage debtors being rescued.

All the while younger people, non home-owners, having ever bleaker prospects because of the special interest of older baby-boomer to protect the values of their homes. We're going to grind to a halt if it continues.

Points taken from Gen, macaque and lir. Can see how it would be unfair and not reasonable now... (12 years ago maybe) - but something needs to jolt house prices back to reality. Some bitter medicine also needs to be dished out to the BTL crew.

whathavewedone

The libdems can say anything they like safe in the knowledge that they're never going to be elected and have to live with the consequences of their policies.

Half of their policies seem to be an attempt to out tory the tories and then you have policies like this which are obviously intended to capture disgruntled labour voters.

I think this really is the politics of envy, a way for the state to steal personal wealth. All for the sake of 1 billion quid? If labour had put this and policies like this in their 1997 manifesto then they wouldn't have got into power. Ahh if only...

If interest rates hadn't been kept so low while house prices were going up and up and up then they wouldn't have risen as high as they did. Hopefully future governments will have learned that lesson. I would certainly expect a lot more criticism from the media if they didn't do that next time round. Ditto with products like 125% mortgage etc for first time buyers.

There's really no need for punitive taxes. It's bad enough that you have to pay stamp duty which is a tax on money you've already paid tax on as it is.