MattW

BBC NEWS | UK | UK Politics | Lib Dem plan for £1m-property tax

Interesting proposal, the worry for me would be how inflation would erode that much like Stamp duty over last 30 years.

the Queen is going to be pissed though

Luminous

iTrader: (3)

Its about time. The rich have to pay, and the poor need tax breaks. Current policy just makes the reasonably well off have to pay it all really. About time that should change

ALi-B

iTrader: (1)

They don't seem to realise that people who have a £1m property could just sell it, buy something cheaper and then use the surplus to buy a nice gaff overseas (preferably in a tax haven).

Over-tax the rich - the rich will emmigrate. As they can afford to move but may end up not being able to afford to stay and maintain a lavish lifestyle.

SJ_Skyline

You can shove this one up your ar$e, Cable

By the time your party gets into power £1 billion will be the going rate for a 1 bed starter home flat.

tanyatriangles

iTrader: (2)

It's all Pie in the Sky anyway. The LibDems won't get into power alone, so they can make whatever promises they want, and come up with whatever wonderful ideas they want, knowing full-well that they will NEVER have to make good, or be called to account, on them.

The other two parties must grind their teeth at it. Mind, those two are so thick-skinned and such liars now that I doubt anything THEY say bothers them either

Even if the LibDems were power-sharing, no-one would then expect them to make good on THEIR promises

AndyC_772

iTrader: (2)

And who exactly are "the rich" in your book?

Anyone with more assets than you?
Anyone with greater income than you?
Anyone whose net worth is greater than £xxx, where xxx is some arbitrary figure?

Does the fact that someone who lives in a big house automatically mean that their regular income is also guaranteed to be very high? Or could it just mean that they've saved hard their entire working life and decided that, of the things they could have spent it on, property seemed most attractive?

Do you think there are enough people out there who are (by your definition) "rich" to actually make a difference, or is "tax the rich" just the green-eyed monster talking?

kingofturds

iTrader: (1)

Instead of coming up with all these new taxes why don't they just make sure the rich pay what they owe in the first place. **** off these tax havens, and come down hard on those millionares who fiddle the accounts to end up paying less tax then their office cleaner.

hodgy0_2

the tax burden in the UK hits the lower middle income (on paye) massively

it even seemed odd to Damon Buffini -- who has a personal fortune of over 100 million pounds

he commented on the fact that as a % of his income he paid much much less than the cleaner who cleaned his offices

TurboKitty

This would hit the people who bought a place at a relatively low price 40+ years ago and have raised their family there and worked hard on maintaining and improving it, perhaps to see that property type and/or area become more desirable, but who don't have much in the way of income or savings.

It will also hit some people who are not particularly well-off who inherit a family home, (and I'm not just thinking stately homes and country piles here. In many areas of the South it doesn't take a lot for a property to be 'worth' £1m).

A home is more than just an asset and I don't think anyone should be forced to sell the house they grew up in, or raised their family in over 40 years or more, just because they can't afford to pay a new tax designed to target the wealthy.

I have similar feelings about the taxes when property is inherited.

J4CKO

iTrader: (1)

Does seem very arbitary, once a house is bought and paid for it should be yoursw, looks like they want to tax people out of their homes, ours is worth getting on for half a million and I earn pretty good money but I dont have a lot spare as it goes in tax and bills, council tax is already quite high and this is just another one. I suppose it is difficult to sympathise with people in million pounds homes for the average earner or home owner but getting the rug pulled from under you isnt much fun whatever level you are at and working hard to pay for layabouts (as well as the genuine welfare cases) is annoying,

Clamp down on those who pay little tax, the cash in had brigade, those who choose not to work, those who malinger, criminals but not somebody based on the value of their home.

Luminous

iTrader: (3)

There are lots of definitions of being rich. One of which is having a house worth £1m+. They may have worked hard to be in this position, but like the rest of us tax has to be paid. The more you have, the more you pay, that is how it works.

If you have £1.2million pound house I am sure extra £1000 a year in taxes is not going to break your bank. It will however contribute to lift the lowest earners in the country out of having to pay tax. Note, I did say workers, not loafers. I am talking about the people who also work really hard all week but only manage to take home less then £10k per year.

And if you cannot afford the extra tax, well at least you have a nice expensive house that you can sell to someone who can A much better position to be in compared to the lowest paid in the country.

TurboKitty

No, owning a £1m+ house does not necessarily mean being rich. Not unless you're wanting to sell the house to access that value.

I know a 'mature' couple who are amongst the least flush of the people I know, but who own a £1m+ house. As I mentioned above, they bought it a long time ago, for a low price as it was a type of property that just wasn't desirable then. They love the place and have lived their throughout most of their married lives. They raised their children there. The house is now worth a lot because tastes change and it's now a desirable property type in a desirable area.

They took a risk buying the place, and have worked hard for it, doing most of what's been needed over the years themselves and on a shoestring budget. However, every penny they have spent on that house was money they had to earn and have already paid tax on. So to say that tax has to be paid is just ridiculous. Why should they have to sell their home, with all their family history, just because they have been lucky? Just because wealthier people now find their house desirable and have pushed the 'value' up doesn't make them any richer. Yes, they have an asset, but it's their family home; the monetary value is nothing to them when compared to their attachment to the place. They'd be destroyed to be taxed out of their home, just because the government feel they are entitled to a chunk of the benefits from this couple's hard work and luck. I don't see the goverment offering tax rebates to those who have been unlucky and lost money on property.

The government are very quick to tax good fortune and are oddly absent, usually, when it all goes pear-shaped, (unless it's the banks that have a problem, of course). They take none of the risk, want nothing to do with the losses but are there with their grasping little mitts as soon as anything goes well for anyone.

It is interesting you should say that, since the couple I mention, with the £1m+ house are also on less than £10k per year. An extra £1000 of tax per year would force them to sell their home.

That's fair to the people in the situation described above, you think? To force them out of their home?! As I said, there is more to a home than a price tag.

Luminous

iTrader: (3)

Yup, its fair to force them out of their own home.

We all work, we all have to pay tax. Putting all your money into your home so you cannot pay your tax is not a reasonable excuse. If it is, then remind me to do that the next time I get a bill - sorry Mr Inland Revenue officer, I just bought a really big house so cannot pay my bill.

If the above situation that you describe is true then selling the house will probably enhance their lives by a large margin. Two people trying to live on less than £10k per year is not a comfortable life style. Yes the house may be nice, but something smaller and cheaper would allow them more disposable income. The choice is ultimately theirs to make, just so long as they pay any tax due.

David Lock

There are plenty of average size houses, especially in London, worth over £1m. Quite a few owned by little old ladies trying to live on a low income. I wouldn't want them forced out of their homes. Is there an exemption for such owners?

Which ever gov't comes into power they will need to raise taxes. Why not raise VAT to 20%. They can exempt some items that hit the low earners although quite bit of stuff is already zero rated. Very easy to do.

I heard that in a recent survey 50% of the population didn't beleve that any action was required to pay off UK's growing debt



dl

hodgy0_2

VAT is quite a regressive tax it hits the poorest hardest-- but governments like it coz it is very cheap to collect.

Deep Singh

1) This shows that Vince Cable is not quite the messiah of economics that the media likes to suggest. Its an unworkable tax, and expensive to administer. Who would value the house, HOW do you value a house? Its what somebody decides to pay for it.
What happens if the price falls from a million to £800,000, what then.

2) Its anti aspirational.

TurboKitty

Luminous, try reading my posts more carefully please.

They have lived in this house for 40-odd years. The house was cheap when they bought it. They've never been wealthy and they've already paid tax on everything they earned. It's not a case of going out and buying a big house and not being able to pay the tax on it.

The house is only worth £1m+ now because of the housing market. The value of their house has been increased by people with more money than they have driving the value up as it's now "desirable". It's not even a particularly big house, (it's the type of house, the area and the commuting potential that make it valuable). They couldn't give a damn about the value. They bought it because they loved it. They stayed there for 40+ years because they love it and they love it even more now they've raised their family there.

Obviously though as they have something that some other people can't have, despite the fact they took the risk in buying the place and have put in 40 years of graft to get it, then it should be taken away.

Frankly luminous, your comments are those of the green-eyed monster. Maybe instead of thinking, "ooh, someone has more than me, it should be taken away from them" perhaps you should be pleased to know that people who aren't highly paid and wealthy can, through hard work, a little risk and some luck, obtain the kind of rewards you are so clearly wanting yourself.

The situation above is absolutely true. And you obviously have no concept of the value of a house which two people bought when they were starting out on their lives together, in which they have shared those lives, taken their parents into to care for them as they aged, seen their children born, seen their parents die, seen their children grow up, and now see their grandchildren play in. Given the disposable nature of possessions, partners and the frequency with which many people move now, I suppose that's not entirely surprising, really. It is sad though.

Financially they would undoubtedly be better off to sell it. But there's is so much more to life than money. I genuinely hope you realise that one day.

GC8

What a stupid remark. Why do people talk such unmitigated crap on forums?

Lisawrx

iTrader: (1)

I seems unworkable to me, although I'm not too clever when it comes to this sort of thing.

You make good points, who values it? More importantly, I too would like to know what would happen if house prices fall for whatever reason and a home drops below the million. This just seems too difficult to implement.

And the story TK mentioned, I think it would be unfair for people to potentially lose a home just because the value has increased over many years.

Something like this doesn't take into account all the variables.

Luminous

iTrader: (3)

Oh I have read what you have written. You just don't seem to understand that in the current climate there are a lot of very poor people who are working and have very little left to live on.

Whenever the tax debate comes up you will always find someone (today its you) talking about how hard someone has worked to get what they have. They talk about skill, opportunity, luck etc etc. People who have more have to pay more tax, its just that simple. The poor cannot afford to do so, the rich can. There are plenty of people who work hard, and I am sure we would all like to pay less tax. But the idea that people who are on less than £10k are having to pay tax when they can barely afford to live is just absurd. These people should be helped not punished. Or would you rather they took the easy route and just sat on their **** and claimed benefits?

The more tax you pay, the more it hurts. I get that, I really do. But when you are sitting on a pile of cash to the tune of a million pounds, and then there are others who are on 0 hour minimum wage contracts barely able to even pay for electricity into their homes.

When you see people like who are working you start to think that the system should be altered so that those at the bottom are given more of a break. The ones sitting at the top are not likely to lose much, yes loads of examples will be shown, but the majority of people who have that much wealth can afford to put at little more into the public purse to help those who are working but are really struggling.

Does that make me a green eyed monster? Maybe, maybe not. The tax is not going to help me, and I am not going to have to pay it either. I just don't think the rich do enough. There is far too high a percentage of wealth held by a very small minority of people.

Perhaps there could be a weighting to take average houses out of the scheme. Its not a tax that is meant to be paid by the average person, but then again I seriously doubt that an average home in London costs £1m.

LanCat

Sounds like yet another example of taxing the south to subside the north

Luminous

iTrader: (3)

Dare I ask what you think of Scotland

LanCat

Luminous

iTrader: (3)

I thought so

hodgy0_2

i find it ironic that the economic crisis we are in has been caused, in the main, by people pushing money around in a never ending circle, many getting obscenely rich in the process and constructing tax efficient vehicles (a polite way of saying they rob the UK tax payer of revenue) to salt money away

when it goes pop -- to get back on an even kiel and reduce government debt the focus is firmly on cutting public services -- often needed by the most vunerable in society who certainly did not benefit from the gold rush of recent years

LanCat

The idea is stupid. A new tax collection method likes just ends up with new tax collectors being employed, new ways of avoiding the tax and new fee opportunities for accountants and all built around an arbitrary number.

Use the existing council house bands and increase the tax on the top band. No new collections required, difficult to avoid and the tax collection is equal across the country.

Oh and I'm surprised at Cable, this blew his "I'm the best chancellor the country never had" image right out of the water. Fool.

TurboKitty

Lisa has grasped this, so I'm going to give it one more go. However, I've had a long day and I am beginning to get narked over the view that it would be ok to kick a lovely couple out of their lifelong home. So, after this I am putting down the computer, stepping away from the internet and going to find something worthwhile on which to expend my pent up narkiness.

I'm not saying it's unfair to tax this couple because they've worked hard. I'm saying it's unfair to tax them on the value of their property as it has accumulated, as Lisa has said, over a large number of years and beyond anything they could otherwise have bought. And it's not fair to just take that away on the grounds that they couldn't afford it now, can't pay a newly proposed tax on it, so shouldn't have it.

Having said that, it's also worth considering what would happen if all the benefits of working hard are taken away from people... I don't see that being good for society and the economy in general either.

I'm not disagreeing with you that the wealthy should pay more tax, (though how much more and how is open to a lot of argument), however, the couple I mention are NOT rich. Yes, they COULD be wealthy if they sold their house, but I don't see why they should have to. That's not raising extra money from people who won't miss it. You may well think that other people are more deserving but I don't agree. Forcing someone out of a house they've owned and loved for more than 40 years, just because the "market" now says it's more valuable than it used to be is not a reasonable thing to do.

Anyway, apart from anything else, if they were forced from their house they would probably also be forced from the area. Like I said, it's now a desirable area and all property there is highly priced. For example, their house, the one worth £1m+, isn't in the top council tax band, and I am pretty sure it's not in the next band down either. Does that help convince you we are not talking about a mansion owned by silver spoon sucking types?

I agree that something needs to be done about the people working and doing their best, but still struggling financially. Don't think for a moment that I don't understand about people needing and deserving a break. However, forcing the sort of people I am talking about out of their homes is not the way to go about trying to fix this situation.

TurboKitty

Ah, but the vulnerable are the least able to complain and kick up a stink about it. They're also the ones who are least likely to be involved in any of the decision making processes, (and so are completely unable to protect themselves from the decisions being made), and they're the least likely to have lots of influential friends who can make waves about it.

Luminous

iTrader: (3)

It will never happen, so have no fear I do see your argument, and while I agree it would be harsh for them, sometimes these things do happen. The "straw that broke the camel's back argument" may apply. Sooner or later some people do have to move away from their home to get something cheaper. It would appear that this tax may be that breaking point for this couple, but then again it may be something else.

I don't think there will be that many people who are in their position. However, I think you do bring up another important point. How can a house that is worth so much not be in the top band for tax. Seems unreasonable to me that there will be others in homes worth a lot less but paying more for them if they just happen to own a house in a less affluent area.

Anyway, it won't happen. So time to put keyboards down