40% Tax on House Sales
19 October 2003, 08:30 AM
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This is going to go down like a lead ballon.
Gordon Brown is considering imposing capital gains tax on ALL house sales (not just second homes as it is now). The move would generate around £11bn a year. All 'profits' from a house sale would be liable for the tax.
Couple of things here: When you move house, you rarely 'see' this profit, as it tends to form part of the price of your new house and most people tend to buy bigger properties rather than smaller ones.
If GB's spending plans are so excessive that he has to keep raising new taxes, isn't it about time to have a look at the spending plans and cut back a little? You can't just keep taxing people to the hilt and not expect them to rebel.
Won't this encourage people to get even bigger mortgages as they now have to cover the new tax bill when they move house? This isn't clever from an econmoic point-of-view and especially not when you consider that they reckon interest rates will rise for the next decade or so.
I've long considered the whole property / mortgage market to be a con - hugely expensive and we rarely see the financial benefit of it.
Please consider this when you come to vote at the next election....
Chris
Gordon Brown is considering imposing capital gains tax on ALL house sales (not just second homes as it is now). The move would generate around £11bn a year. All 'profits' from a house sale would be liable for the tax.
Couple of things here: When you move house, you rarely 'see' this profit, as it tends to form part of the price of your new house and most people tend to buy bigger properties rather than smaller ones.
If GB's spending plans are so excessive that he has to keep raising new taxes, isn't it about time to have a look at the spending plans and cut back a little? You can't just keep taxing people to the hilt and not expect them to rebel.
Won't this encourage people to get even bigger mortgages as they now have to cover the new tax bill when they move house? This isn't clever from an econmoic point-of-view and especially not when you consider that they reckon interest rates will rise for the next decade or so.
I've long considered the whole property / mortgage market to be a con - hugely expensive and we rarely see the financial benefit of it.
Please consider this when you come to vote at the next election....
Chris
19 October 2003, 09:15 AM
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The bloke is a bloody moron [img]images/smilies/mad.gif[/img]
Its his only answer to curbing the housing boom as interest rates can't rise dramatically due to killing off manufacturing and then unemployment going up and then back into recession blah blah blah
There wont be one person in this country who will be happy to pay 40% on house selling profits and if he implements this policy then its definately bye bye labour at the next election, which I strongly hope is the case anyway.
Its his only answer to curbing the housing boom as interest rates can't rise dramatically due to killing off manufacturing and then unemployment going up and then back into recession blah blah blah
There wont be one person in this country who will be happy to pay 40% on house selling profits and if he implements this policy then its definately bye bye labour at the next election, which I strongly hope is the case anyway.
19 October 2003, 09:30 AM
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Interesting that only six days ago Tony B.Liar said this.
"...Tony Blair has indicated that he is against higher taxes, arguing they could "destroy the competitiveness of the economy"...." and "...He suggested that he viewed higher taxes as dangerous..."
What effect do you think this would have on house prices, if it actually happened? Do you think it's plausible that people would further hike the sale price to compensate for the Government taking a slice?
[Edited by Fatman - 10/19/2003 9:30:52 AM]
"...Tony Blair has indicated that he is against higher taxes, arguing they could "destroy the competitiveness of the economy"...." and "...He suggested that he viewed higher taxes as dangerous..."
What effect do you think this would have on house prices, if it actually happened? Do you think it's plausible that people would further hike the sale price to compensate for the Government taking a slice?
[Edited by Fatman - 10/19/2003 9:30:52 AM]
19 October 2003, 09:36 AM
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<quote>I've long considered the whole property / mortgage market to be a con - hugely expensive and we rarely see the financial benefit of it.</quote>
Agree Chris - unfortunately most others don't see it that way. They all think they are making big money because their house is increasing in value so rapidly. However they forget that the next house they will buy will have increased by an even larger amount meaning they have to find even more money. Then there are the poor first time buyers struggling to get on the ladder.
IMHO The whole business stinks - what with dodgy estate agents who manipulate the market for the sake of their commissions, to surveyors who offer no guarantees and the banks and building societies who lend stupid amounts.
Agree Chris - unfortunately most others don't see it that way. They all think they are making big money because their house is increasing in value so rapidly. However they forget that the next house they will buy will have increased by an even larger amount meaning they have to find even more money. Then there are the poor first time buyers struggling to get on the ladder.
IMHO The whole business stinks - what with dodgy estate agents who manipulate the market for the sake of their commissions, to surveyors who offer no guarantees and the banks and building societies who lend stupid amounts.
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19 October 2003, 10:09 AM
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Even so should they even be coming up with idea’s like this, it just amounts to highway robbery[img]images/smilies/mad.gif[/img]. I think it’s about time that the people take it to the streets again like the old poll tax days
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19 October 2003, 11:07 AM
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IIRC the basic principle of tax is that if you are taxed on the profit, you can claim back on the loss.
I don't believe the idea for a second - it would kill the traditional British home ownership stone dead - but just imagine if he did it, and the market plummeted as no-one wanted to buy/sell?
Drop in house prices means they'd have to pay back 40% of the loss, no?
I don't believe the idea for a second - it would kill the traditional British home ownership stone dead - but just imagine if he did it, and the market plummeted as no-one wanted to buy/sell?
Drop in house prices means they'd have to pay back 40% of the loss, no?
19 October 2003, 05:44 PM
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Don't the government want us all to start renting though, what's the point of that?
Don't get me started with fees etc, I'm in the middle of buying my first house just now! Luckily I'm buying it off my brother so we've cut the estate agents out, I'm still paying the solicitors £450 to do **** all as far as I can see though
Don't get me started with fees etc, I'm in the middle of buying my first house just now! Luckily I'm buying it off my brother so we've cut the estate agents out, I'm still paying the solicitors £450 to do **** all as far as I can see though
19 October 2003, 05:55 PM
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I've heard this before. Both Blair and Brown are now so detached from the reality of life in this country that they would consider anything to increase the treasury's income at the public's expense. I wouldn't put it past them at all.
UB
UB
19 October 2003, 08:12 PM
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It will apply to houses over £500k to start with and the tax take will decrease over time, ie. after 1o years there will be NO tax to pay!
Its idea is to get the speculators to pay tax on their profits, those people who make money by moving every year, tarting up and then selling for a huge profit .... and thats what it is PROFIT
And as we all know, profits are taxed .... so why shouldn't these be??
All very fair in my opinion!!
Go get 'em Brown!!!
Pete
Its idea is to get the speculators to pay tax on their profits, those people who make money by moving every year, tarting up and then selling for a huge profit .... and thats what it is PROFIT
And as we all know, profits are taxed .... so why shouldn't these be??
All very fair in my opinion!!
Go get 'em Brown!!!
Pete
19 October 2003, 08:22 PM
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The point is Pete - this isn't just going to be hitting people who buy and sell property for profit. You can bet your life that it will be set well below £500K if it comes in (that was only a suggested limit in the paper). The story isn't made up. Various independent tax consulants confirmed that they had been in talks with the treasury.
Chris
Chris
19 October 2003, 08:32 PM
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Yes, but when we are talking housing we are also talking 'paper' money .... it doesn't actually ever exsist, unless you move down or die and your relatives gain the profit.
So, a house with a price of say, £100k, will either have a buyer or not .... if you have given your money to the taxman and you can only afford £80k then THAT is the price the house HAS to be - or it doesn't sell!!
Therefore, the money in circulation to buy property remains THE SAME, its the distribution of that money which changes ....... you remain financially EXACTLY neutral!!
Pete
So, a house with a price of say, £100k, will either have a buyer or not .... if you have given your money to the taxman and you can only afford £80k then THAT is the price the house HAS to be - or it doesn't sell!!
Therefore, the money in circulation to buy property remains THE SAME, its the distribution of that money which changes ....... you remain financially EXACTLY neutral!!
Pete
20 October 2003, 12:15 AM
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Well I cant see how it would work anyway, surely you would just remortgage before selling to 100% of the property value, sell, pay the mortgage off, have nothing left profit wise and then buy a new place with the same 100% mortgage and then pay off the mortgage once bought and in the property.
Its a crazy idea that would kill the housing market as people wouldnt sell, then there would be even less properties on the market and so prices would go up even higher!
Whats needed is to flood the market with affordable housing so prices come down but will the Government force/enforce the building of affordable housing, like **** they will [img]images/smilies/mad.gif[/img]
Get out Labour and stay out! Totally ruining this country more than they have ever done, rip off Britain is getting worse by the day [img]images/smilies/mad.gif[/img]
Its a crazy idea that would kill the housing market as people wouldnt sell, then there would be even less properties on the market and so prices would go up even higher!
Whats needed is to flood the market with affordable housing so prices come down but will the Government force/enforce the building of affordable housing, like **** they will [img]images/smilies/mad.gif[/img]
Get out Labour and stay out! Totally ruining this country more than they have ever done, rip off Britain is getting worse by the day [img]images/smilies/mad.gif[/img]
20 October 2003, 12:27 AM
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bravo2zero, CGT would be calculated on the basis of the purchase price - a remortgage would not be a valid method of tax avoidance - you don't think the Revenue are that stupid do you? :-)
This is is how the rules on CGT are currently applied to 2nd homes/buy to let homes....etc
However, as Corgi said, there are other ways for tax avoidance in this respect.
[Edited by imlach - 10/20/2003 12:29:05 AM]
This is is how the rules on CGT are currently applied to 2nd homes/buy to let homes....etc
However, as Corgi said, there are other ways for tax avoidance in this respect.
[Edited by imlach - 10/20/2003 12:29:05 AM]
20 October 2003, 09:08 AM
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Here in Portugal, I think profit on sale of your second house is taxed at 40% UNLESS you use it to buy another house.
At least, it was a year ago. All changed in June.
At least, it was a year ago. All changed in June.
20 October 2003, 09:18 AM
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Its bad enough getting hit with stamp duty, solicitors fees and surveyor fees that aint really worth a to$$ [img]images/smilies/mad.gif[/img]
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