How low will property go?

wotsthat

mwpt wrote: »

That would be nice, but unrealistic. In fact, as the population ages and wealth inequality continues to increase, I can only see taxes on wealthier people needing to increase.

Until some form of utopian post scarcity is reached.

That's an apology for over-spending.

The two of us could take a week off, sit in number 11, clear the deficit (and more) and reduce the tax burden too because we don't need to seek votes from rent seekers.

It's a doddle to give people 'free' money but they really don't like it when it's taken away.

System

To reduce wealth inequality, stamp duty should be axed on all properties and replaced by capital gains tax set at 20% paid by the seller on completion of a sale. This would apply to all sellers.

wotsthat

mrlegend123 wrote: »

To reduce wealth inequality, stamp duty should be axed on all properties and replaced by capital gains tax set at 20% paid by the seller on completion of a sale. This would apply to all sellers.

I don't get it. You want to remove a property related tax and replace it with a property related tax. You've attempted to change the tax target but it'll be shared between the parties in much the same way as now.

The housebuilders might be happy as anyone with any equity puts off their sale.

ukcarper

mrlegend123 wrote: »

To reduce wealth inequality, stamp duty should be axed on all properties and replaced by capital gains tax set at 20% paid by the seller on completion of a sale. This would apply to all sellers.

That would stop people downsizing and reduce the number of people moving.

cells

mrlegend123 wrote: »

To reduce wealth inequality, stamp duty should be axed on all properties and replaced by capital gains tax set at 20% paid by the seller on completion of a sale. This would apply to all sellers.

No government proposing such a silly idea would get elected. Some 1.2 million properties are sold each year of which probably about 1 million are owners and not landlords. You will be saying to them that they will need to pay tens of thousands of pounds.

1 million households per year or 5 million households in a 5 year government term. That is probably in excess of 10 million voters you will very highly !!!! off

It could also be a huge tax on inflationary (imaginary) gains.

cells

wotsthat wrote: »

I don't get it. You want to remove a property related tax and replace it with a property related tax. You've attempted to change the tax target but it'll be shared between the parties in much the same way as now.

The housebuilders might be happy as anyone with any equity puts off their sale.

the biggest problem with stamp duty is that its a cost on transactions rather than ownership. The tax should be rebated to those who move sooner than average.

Right now I think the average household moves once every 25 years. Of course some move far more frequently and some far less so. The tax should thus be rebated by (20-x)/20th that you have lived in the property.

So for instance if you buy a house and the stamp duty is £20k and you decide to move 10 years later you should get £10k of it back. If you decide to move 5 years later you should get £15k of it back. If on the one extreme you buy a house and need to move a year later for work or whatever you get £19k of the £20k back. Possibly also index the sum for inflation or at least at the BOE rate.

It then changes from a transaction tax to a property tax but at the point of purchase. Of course some will argue just scrapping it altogether is better but I think at least the above is a lot better than the current system

System

The Capital Gains Tax would help fund the construction of affordable housing therefore getting more families onto the property ladder. I understand this idea would never become a reality....

cells

mrlegend123 wrote: »

The Capital Gains Tax would help fund the construction of affordable housing

There is a good argument that ~75% of the country does not need any more affordable housing. That is to say housing in those places is already more affordable than social housing. People just need more reasonable access to finance

There is also a reasonable argument that in the ~25% of areas where buying a house is more expensive than social homes it might be more prudent long term to see a small population shift from the ~25% areas to the ~75% areas

lisyloo

It is nice to set them on behaviours that might be considered luxury, such as owning more than one home.

Do you see it as a luxury for people who work away from their long term permanent home an don't have secure long term employment e.g. MPs
I'm in a similar situation to that and don't consider it a luxury, plus with stamp duty you've made it more difficult for people to sell and move (say for a 5 year term as an MP).

mwpt

lisyloo wrote: »

Do you see it as a luxury for people who work away from their long term permanent home an don't have secure long term employment e.g. MPs
I'm in a similar situation to that and don't consider it a luxury, plus with stamp duty you've made it more difficult for people to sell and move (say for a 5 year term as an MP).

What percentage of people who would pay the tax do you see as being in that situation? Assuming we don't compromise on the idea of taxing owning more than one home, what proposal do you have to deal with the edge cases?