How to protect your assets under a Corbyn government

zagfles

Glen_Clark wrote: »

:rotfl:Amazing the arguments that Nimbys come up with to avoid the obvious simple supply and demand - increasing the supply of housing makes it more affordable.
Building more roads doesn't reduce the overall volume of traffic. It just reduces congestion by distributing the traffic over more roads - as becomes obvious when you cross the channel and see traffic densities about one third of those in England.
Similarly building more houses doesn't reduce the number of people. It just means more of them can afford a home.

So explain why the housing stock has risen faster than the population over the last few decades, yet there's a housing shortage?

There's too much just looking at the supply side, not the demand side. One of the problems is that demand is not just driven by the need for a roof over your head, it's also driven by investment potential. If you have policies which reduce the investment potential (such as CGT, taxes on second homes etc) then you reduce demand.

If you just increase supply, then you could just end up with fewer people per household, or more second homes/holiday homes. The demand side needs look at as well - skew policies so that demand comes more from the need for a roof over your head and less from the thought of making money, or not losing money by delaying buying etc.

It's exactly the same as roads. Build more roads, people will make more journeys.

Malthusian

bigadaj wrote: »

The cgt exemption on main properties is an anomaly that should be removed, this in itself will damp down house prices given the current cgt system.

Charging CGT on primary residences would destroy the housing market. It would mean that you couldn't move house without having to downsize, live in a poorer area, or spend money for nothing just to keep the same quality of life. Because although your house has increased by X%, the house you want to buy has also increased by X%, and as you would have to pay a CGT bill, you can't afford as nice a house anymore. So no-one would move if they had any alternative.

While this problem technically already exists with stamp duty (which should be abolished), charging CGT on main properties would ramp it up 10-fold for anyone unfortunate enough to live somewhere where people want to live.

It would be a terrific boost for very rich landlords and property developers as a) limited companies don't pay CGT b) as being a homeowner would be a millstone, far more people would rent c) for the same reason, houses would be cheaper.

A classic case of smashing the middle class to make a political point.

BananaRepublic

grey_gym_sock wrote: »

you have just stated the idea that tax rises reduce tax revenue, without explaining how. that is just evidence-free assertion.

It's a simple truth. Increase taxes too much and the wealthy simply move their assets overseas and come up with wheezes to escape the tax.

grey_gym_sock wrote: »

the tories don't want to crack down on tax avoidance/evasion because it's being done by their friends (and sometimes by them). IMHO, the current labour leadership does want to.

This is just the usual childish sloganeering: Tories evil scum, Labour all warm and cuddly and lovely. In truth Labour were they to come into power - God forbid - would fare no better and no worse than the Tories in regard to tax avoidance. In fact under Labour BTL was lucrative due to massive and unfair tax refunds, something the Tories have curbed.

grey_gym_sock wrote: »

it's not relevant to labour's proposals for modest tax increases on higher incomes.

They are not modest.

grey_gym_sock wrote: »

increasing public spending by more than they increase taxes would be a good idea.

It is if you want to cripple the country.

grey_gym_sock wrote: »

yes, it's a small fall. the point is that any fall at all over 10 years is a dreadful performance: you'd expect a substantial rise!

Not given the hit that our economy took during the last crash due to our dependence on financial services.

grey_gym_sock wrote: »

huh? the greek government is now following policies dictated to it by the EC/ECB/IMF, on tax, spending, privatizations, etc. that's what i mean by not being in control of their economy. they can hardly make any significant decisions. (how they got into the mess is another, very large topic.)

of course greece is in a far worse state than the UK. mainly because they have been forced to implement vastly more extreme austerity policies than those which the UK's government has chosen to implement, without external pressure.

The Greeks got into their parlous state by massive accounting fraud and state profligacy. The EU allowed them to join the Euro without proper vetting, and hence they share responsibility for the state of Greece today. It was financial mismanagement on a grand scale by the Greeks. The EU has refused to bail them out, though IMO they have unfairly placed all of the blame onto the Greeks. It's a bit like lending money to someone when you know they cannot repay it, then penalising them for not repaying it.

grey_gym_sock wrote: »

it's pretty simple. a lot of powerful people don't want a genuinely left-wing government to succeed, and will try to sabotage it.

Left wing governments do not succeed and when things go wrong, they blame powerful people, vested interests etc.

zagfles

Malthusian wrote: »

Charging CGT on primary residences would destroy the housing market. It would mean that you couldn't move house without having to downsize, live in a poorer area, or spend money for nothing just to keep the same quality of life. Because although your house has increased by X%, the house you want to buy has also increased by X%, and as you would have to pay a CGT bill, you can't afford as nice a house anymore. So no-one would move if they had any alternative.

I'd do it like some countries do and allow roll-forwards, so you only ever pay CGT when you downsize or when move abroad etc. The idea is to skew the demand for housing away from the investment potential and towards simply a place to live. You reduce the money people can make through the increase in house prices - if they are moving upmarket they are already punished by rising prices as the price differential is likely to be more than it was.

Also only applied from the point it's brought in, not backdated to when you bought the house. So should discourage upsizing, like some people do just because they can afford it and "it's a good investment", rather than discourage downsizing.

While this problem technically already exists with stamp duty (which should be abolished), charging CGT on main properties would ramp it up 10-fold for anyone unfortunate enough to live somewhere where people want to live.

It would be a terrific boost for very rich landlords and property developers as a) limited companies don't pay CGT b) as being a homeowner would be a millstone, far more people would rent c) for the same reason, houses would be cheaper.

a) they pay tax on profits though b) why? I didn't buy my house to make money, I bought it because it's cheaper owning it than renting it. c) Yes, that's the idea. Or do you think high house prices are good?

A classic case of smashing the middle class to make a political point.

No it isn't. I'm probably what you'd call a middle class homeowner. It's sensible policy to address the housing crisis, reduce demand.

Glen_Clark

zagfles wrote: »

So explain why the housing stock has risen faster than the population over the last few decades, yet there's a housing shortage?

As the gap between rich and poor increases, more people can afford multiple homes. Which you could offset by allowing more to be built. But by restricting the supply investors expect prices to increase. So they buy more landbanks and more multiple homes.....

zagfles

Glen_Clark wrote: »

As the gap between rich and poor increases, more people can afford multiple homes. Which you could offset by allowing more to be built. But by restricting the supply investors expect prices to increase. So they buy more landbanks and more multiple homes.....

So more supply, housing becomes more affordable, more people can afford multiple homes, raising prices back to where they were!

Cut the demand for multiple homes through taxation policy. Persuade people to make other investments instead. rather than invest in stuff that other people desparately need.

Filo25

In answer to the original question, let's just say I'm grateful I qualify for an Irish passport by birth in Northern Ireland if things really do hit the fan!

The Labour manifesto actually had relatively modest proposals for taxation and spending but I am totally unconvinced that they would stop there if they came into power with a significant mandate, for a start on the spending side of things they actually were offering next to nothing to help those on benefits who have been hit by austerity, does anyone honestly think a Corbyn/McDonnell led government would leave those cuts in place, where would the funding come from (even the existing proposals in the manifesto weren't adequately funded in the medium-long term)

I think my overall problem with a Corbyn led government is that I don't think they have ever found a problem for which their answer isn't more taxation/more spending/ more government control.

I would probably consider myself in the old soft-left economically as well, I've even been a member of Labour at one time, I do think we need a fairer society, but we also need one capable of delivering growth and economic success, its the second part of that balancing act that I think a Corbyn led government (with a big enough mandate to push through their agenda) would fail miserably at.

redux

unkle wrote: »

To do so you'll need to first predict what Labour would do, their manifesto provides some clues but it is far from clear exactly.

For me, my thoughts are:

1. IHT - they are likely to make this more onerous, in my view highly likely to remove the additional amount for property and also likely lower the £325k limit before tax applies. Therefore best to give away to your children/grandchildren now if you can.

History shows your misgivings might be misplaced.

There has never been a decrease in the allowance.

The last Labour government increased the allowance every year except the last two, whereas under George Osborne it was stationary for a length of time that matches only the 1940s and 50s

Osborne's subsequent increases with property bands only take it up to about where it would have reached with steady annual increases.

https://www.gov.uk/government/publications/rates-and-allowances-inheritance-tax-thresholds/inheritance-tax-thresholds

BananaRepublic

zagfles wrote: »

So explain why the housing stock has risen faster than the population over the last few decades, yet there's a housing shortage?

It has? Not according to the data I've seen. House building has been ~150,000 per year for the last ten years, immigration alone has been ~300,000 a year, then throw in population growth due to net births, and more people living on their own, and you see that house building is far below demand.

BananaRepublic

redux wrote: »

History shows your misgivings might be misplaced.

There has never been a decrease in the allowance.

The last Labour government increased the allowance every year except the last two, whereas under George Osborne it was stationary for a length of time that matches only the 1940s and 50s

Osborne's subsequent increases with property bands only take it up to about where it would have reached with steady annual increases.

https://www.gov.uk/government/publications/rates-and-allowances-inheritance-tax-thresholds/inheritance-tax-thresholds

Except we have never had a far left government, and many would argue that the Blair government was not even left wing. This Labour party are continually playing the class war card, and Lord knows what might happen if they got into power.