Labour plans and house prices

Innys1

CLAPTON wrote: »

There is limited supply now so best to increase the price now and get the benefit from the increased rent without having to pay the tax.


I have no view about greed and landlords but simply commenting upon the economics.

Even if there is limited supply now, unless all of the landlords increase their rents now by the same amount, there's little point in me doing so. I'll just have a vacant house until the tax is levied, which is by no means guaranteed.

Innys1

padington wrote: »

The proposed tax looks like it's only 1% tax over 2 million a year. So a 2k property pays nothing & a 2.5k property pays 5k a year.
This 2 million threshold will also be increased by the rate of 'inflation' every year so there is no slippage and the money only paid in your lifetime if you can afford it.

I think it's a pretty good way of paying back the national debt myself. It's quite easy to police and it's proportionally fair.

Also I doubt it will result in homes split into flats because the tax will be served on your entire property portfolio, regardless of how it is split up.

I guess it's possible this will push up rent for tenants living in 2 million plus property's but it won't for tenants living less than 2 million properties (or portfolio's) giving the small buy to let person, an upper hand.

Perhaps just a case of sour grapes by those rich enough to know better ?

You think it's fair for income to be taxed twice?

CLAPTON

Innys1 wrote: »

You think it's fair for income to be taxed twice?

taxed twice like
-council tax
-VAT
-Green levies on utilities
-fuel tax
-alcohol tax
-car tax
-stamp duty
etc

purch

Innys1 wrote: »

You think it's fair for income to be taxed twice?

I would have thought that anyone who was renting out a property with this kind of value would have arranged their "business" in such a way as to minimise tax.

If you don't currently, then this should be the wake up call you need to start treating your "business" in a professional manner.

Zelazny

Innys1 wrote: »

You think it's fair for income to be taxed twice?

Sadly, it already is, and more than twice.

Suppose a person works for a company and earns the average wage (~£25k iirc). The person earns the company an extra £100 and the company decides to spend it all rewarding them - this would be spent as follows:

Employers national insurance: 13.8% of what is paid (excluding this deduction): £12.13

Employee is paid (gross): £87.87
Income tax @ 20%: £17.57
National Insurance @ 12%: £10.54

Leaves a take home pay of: £59.76

(so the "average" person is already paying more than 40% tax on their income...)

Then suppose the person were to spend all of it on a computer game (downloaded), the rate of VAT is 20% (on the total excluding VAT) so we have:

Expenditure: £59.76
VAT: £9.96
Retailer gets: £49.80

We can then model what the retailer does with this money, but it starts to get recursive and complex.

We can see from the above though, that that employer has had £100 allocated to them, and for that they've got a little under £50 of goods, and have lost money to 4 different taxes. Consider how much worse this is if the money had been spent on petrol, alcohol or cigarettes.

We're all already taxed more than twice...

Bantex_2

I thought council tax was payable by the tenants.

Loughton_Monkey

Bantex wrote: »

I thought council tax was payable by the tenants.

Except those on Council Tax Benefit in which case us taxpayers pay it.

Innys1

Zelazny wrote: »

Sadly, it already is, and more than twice.

Suppose a person works for a company and earns the average wage (~£25k iirc). The person earns the company an extra £100 and the company decides to spend it all rewarding them - this would be spent as follows:

Employers national insurance: 13.8% of what is paid (excluding this deduction): £12.13

Employee is paid (gross): £87.87
Income tax @ 20%: £17.57
National Insurance @ 12%: £10.54

Leaves a take home pay of: £59.76

(so the "average" person is already paying more than 40% tax on their income...)

Then suppose the person were to spend all of it on a computer game (downloaded), the rate of VAT is 20% (on the total excluding VAT) so we have:

Expenditure: £59.76
VAT: £9.96
Retailer gets: £49.80

We can then model what the retailer does with this money, but it starts to get recursive and complex.

We can see from the above though, that that employer has had £100 allocated to them, and for that they've got a little under £50 of goods, and have lost money to 4 different taxes. Consider how much worse this is if the money had been spent on petrol, alcohol or cigarettes.

We're all already taxed more than twice...

The difference in your example above is take home pay above is ringfenced, until it is used to purchase something else. When it is used to buy the computer game, only then is the 20% VAT levied.

What's being proposed is, say, net rental income of £60 (after 40% tax) is then taxed again before it can be used to purchase something else. To me, that's something totally different.

cells

Innys1 wrote: »

That's not a great guess.

Plus, I thought the rate being proposeit. was 1%, not 0.5%? Whatever the rate, there's no source of income to pay it, other than the rent which has already been taxed.

A civil society is not one that taxes the same income repeatedly so that the individual is left with nothing, irrespective of the rate.

Ok lets assume its 50,000 such homes are rented. I find that difficult to believe but lets go woth It. That is 0.5% of the rental stock hardly a large number.

as for the arguments of not taxing capital I find that quite absurd. Why should income taxes make up virtually all taxes. It would be fair to have oerhaos 20% of taxes on capital and 80% on income but not tje current situation which is closer to 0% and 100%

markharding557

Labours announcements are nothing more than window dressing!
They won't even dent this countries housing shortage.