homebuyers are increasingly choosing to refurbish their own homes instead of moving

westernpromise

steampowered wrote: »

You are conflating two completely separate concepts: (1) how tax should be raised, and (ii) how much tax should be raised.

Even if you are a socialist and believe that the social housing budget should be increased enormously, you should want that money to be collected in the most economically efficient and fair way possible.

Stamp duty is a very bad choice. Punitive rates of stamp duty disincentivise people from moving and that is in nobody's interest. For example it makes it more difficult for people to move house for work. And it makes it very expensive for people to downsize after their children leave the family home.

Raising money through stamp duty also has the very strange effect that people who inherit millions from their parents (and therefore move into an expensive house at a young age) pay much less tax than people who worked for it (by starting off in cheaper homes and upsizing as they become more successful, and therefore move more times during their lives). That is a very strange outcome for someone who claims to be a socialist.

It would be much better for the money to be raised from some sort of property tax or land value tax - i.e. taxing people for occupying big properties, and landlords for the profits they make - rather than taxing people at the point of sale.

Nah. He just envies and hates people who've done better.

Ronaldo_Mconaldo

steampowered wrote: »

It isn't rocket science. You could name pretty much any other developed country anywhere in the world and would find they have a more effective way of taxing property than we do.

In fact we already have a reasonable way of taxing property - council tax. Council tax is also a deeply flawed - having being introduced as an emergency substitute to the poll tax and never properly thought through - but at least taxing occupation of property makes far more economic sense than taxing people for moving from one property to another.

What prevents the stamp duty system from being reformed is political will power. Not the technical complexity of changing the system.


Renters pay council tax.

I am not quite sure why or how you think renters should pay stamp duty, given that they do not own the property.

One could also point out that the costs of being a landlord are taken into account by rents. As landlords frequently tell people over and over again each time something affecting landlords is announced in a budget.

I didn't say they don't pay council tax, I was saying that if you increase council tax then owners and renters will both pay the increased amount, which is counter productive if the idea is to use the increase to attempt to reduce the cost of housing people.

buglawton

steampowered wrote: »

You are conflating two completely separate concepts: (1) how tax should be raised, and (ii) how much tax should be raised.

Even if you are a socialist and believe that the social housing budget should be increased enormously, you should want that money to be collected in the most economically efficient and fair way possible.

Stamp duty is a very bad choice. Punitive rates of stamp duty disincentivise people from moving and that is in nobody's interest. For example it makes it more difficult for people to move house for work. And it makes it very expensive for people to downsize after their children leave the family home.

Raising money through stamp duty also has the very strange effect that people who inherit millions from their parents (and therefore move into an expensive house at a young age) pay much less tax than people who worked for it (by starting off in cheaper homes and upsizing as they become more successful, and therefore move more times during their lives). That is a very strange outcome for someone who claims to be a socialist.

It would be much better for the money to be raised from some sort of property tax or land value tax - i.e. taxing people for occupying big properties, and landlords for the profits they make - rather than taxing people at the point of sale.

Correct. More years ago than I care to admit, I wrote a school essay proposing that 'Rates' as they were then, were converted into a proper progressive local income tax. And this was even long before Thatcher's disastrous experiment with 'poll tax'.

BobQ

michaels wrote: »

Personally I don't see why there should be any tax on the transaction.

What should be taxed are increases in value above inflation as these are caused by we as a society deciding to limit housebuilding land. However the removal of the ppr would act to stop transactions dead so my solution would be to make it chargeable on equity withdrwal from housing, deferrable until death.

Why not just tax all wealth at the time of death?

westernpromise

BobQ wrote: »

Why not just tax all wealth at the time of death?

Because none of it belongs to the state, which has no claim whatever.

Its owner should determine what happens to it.

Malthusian

BobQ wrote: »

Why not just tax all wealth at the time of death?

Because anyone with two bob to rub together would retire abroad and stay there.

ReadingTim

Malthusian wrote: »

Because anyone with two bob to rub together would retire abroad and stay there.

Or come up with increasingly more inventive ways of "giving" it away before they die... in not very philanthropic ways

BobQ

westernpromise wrote: »

Because none of it belongs to the state, which has no claim whatever.

Its owner should determine what happens to it.

Well you can apply the same argument to income tax, stamp duty and VAT. The state has no right to the proceeds of any tax but not if it decides otherwise.

Malthusian wrote: »

Because anyone with two bob to rub together would retire abroad and stay there.

These patriots will always exist. The same ones avoid inheritance tax too.

westernpromise

BobQ wrote: »

Well you can apply the same argument to income tax, stamp duty and VAT. The state has no right to the proceeds of any tax but not if it decides otherwise.

Income tax, stamp duty and VAT are transaction or earnings taxes. Inheritance tax is confiscation of what people have bought net of those taxes.

A land value tax of 3% would mean you had your taken off you by the state every 33 years.

The state's first duty is to spend as little as necessary. When I see evidence of that I'll pay tax willingly.

lisyloo

BobQ wrote: »

Why not just tax all wealth at the time of death?

Because rich people find a way around it.
Most recent example being duke of Westminster.