LEAVE the Conservative Party and save your country!
Comments
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This.Jezyboy said:Feel like whether there is CGT or not is just dicking about at the edges of the housing market.
Not enough houses, subsidising high prices through help to buy and stamp duty holidays would all seem to be more worth looking at.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition1 -
I don’t really see how that’s relevant.pangolin said:
What is the profit do you think? You mentioned the headline figures but no info on mortgage cost, renovations, council tax, etc etc.rick_chasey said:
Nonsense. Wealth is wealth. If you chose to tie it up in illiquid assets that’s your business.surrey_commuter said:
You are moving the goalposts. There is no wayyou consider living in a house that you own outright worth £500k is incredibly wealthy.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Incredibly wealthy is millions in disposable assets
I could have chosen someone who bought a house in Fulham in the early 90s and it would be 3x more profit.
Because the person may or may not have had to lever up to buy it matters if they have to pay cgt?
Or because this asset class needs some upkeep? Why not bin it off for all real estate then, rather than just first homes?
We all pay council tax.0 -
You're making a point about how much profit he's made and conflating it with him being able to retire.rick_chasey said:
I don’t really see how that’s relevant.pangolin said:
What is the profit do you think? You mentioned the headline figures but no info on mortgage cost, renovations, council tax, etc etc.rick_chasey said:
Nonsense. Wealth is wealth. If you chose to tie it up in illiquid assets that’s your business.surrey_commuter said:
You are moving the goalposts. There is no wayyou consider living in a house that you own outright worth £500k is incredibly wealthy.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Incredibly wealthy is millions in disposable assets
I could have chosen someone who bought a house in Fulham in the early 90s and it would be 3x more profit.
Because the person may or may not have had to lever up to buy it matters if they have to pay cgt?
Or because this asset class needs some upkeep? Why not bin it off for all real estate then, rather than just first homes?
We all pay council tax.
1. We have no idea how much "profit" he made.
2. He hasn't realised the profit yet so I'm not sure why it's relevant to him retiring
Sure no longer having to pay off a mortgage makes retiring easier but that would be the case even if the house had stayed at £70k no?- Genesis Croix de Fer
- Dolan Tuono0 -
If you operate a commercial property company then you get tax relief on interest payments and legitimate expenses, so if you tax “profits” on primary residences then taxing (sale price less purchase price) does seem unduly harsh.rick_chasey said:
I don’t really see how that’s relevant.pangolin said:
What is the profit do you think? You mentioned the headline figures but no info on mortgage cost, renovations, council tax, etc etc.rick_chasey said:
Nonsense. Wealth is wealth. If you chose to tie it up in illiquid assets that’s your business.surrey_commuter said:
You are moving the goalposts. There is no wayyou consider living in a house that you own outright worth £500k is incredibly wealthy.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Incredibly wealthy is millions in disposable assets
I could have chosen someone who bought a house in Fulham in the early 90s and it would be 3x more profit.
Because the person may or may not have had to lever up to buy it matters if they have to pay cgt?
Or because this asset class needs some upkeep? Why not bin it off for all real estate then, rather than just first homes?
We all pay council tax.
FWIW, I’m not in favour, unless the tax rate was introduced at a low level eg 5% and gradually increased so the behavioural impacts happen smoothly over time. Introducing a tax of - say 40% - to apply from “Day 1” would cause an almighty disruption to the housing market in an attempt to crystallise gains on it before “Day 0”.
And as others have said, the tax would fundamentally distort the housing market with who knows what consequences?
If one wants more tax revenue then income tax is the way to go. Simple. Well understood. And reasonably “fair” in that higher rates only apply on income above a threshold.
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No we don't. There are lots of exemptions.rick_chasey said:
I don’t really see how that’s relevant.pangolin said:
What is the profit do you think? You mentioned the headline figures but no info on mortgage cost, renovations, council tax, etc etc.rick_chasey said:
Nonsense. Wealth is wealth. If you chose to tie it up in illiquid assets that’s your business.surrey_commuter said:
You are moving the goalposts. There is no wayyou consider living in a house that you own outright worth £500k is incredibly wealthy.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Incredibly wealthy is millions in disposable assets
I could have chosen someone who bought a house in Fulham in the early 90s and it would be 3x more profit.
Because the person may or may not have had to lever up to buy it matters if they have to pay cgt?
Or because this asset class needs some upkeep? Why not bin it off for all real estate then, rather than just first homes?
We all pay council tax.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
When you distribute the proceeds out the company that owns property to an individual it gets taxed. When you sell shares in the company at a profit... it gets taxed.wallace_and_gromit said:
If you operate a commercial property company then you get tax relief on interest payments and legitimate expenses, so if you tax “profits” on primary residences then taxing (sale price less purchase price) does seem unduly harsh.rick_chasey said:
I don’t really see how that’s relevant.pangolin said:
What is the profit do you think? You mentioned the headline figures but no info on mortgage cost, renovations, council tax, etc etc.rick_chasey said:
Nonsense. Wealth is wealth. If you chose to tie it up in illiquid assets that’s your business.surrey_commuter said:
You are moving the goalposts. There is no wayyou consider living in a house that you own outright worth £500k is incredibly wealthy.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Incredibly wealthy is millions in disposable assets
I could have chosen someone who bought a house in Fulham in the early 90s and it would be 3x more profit.
Because the person may or may not have had to lever up to buy it matters if they have to pay cgt?
Or because this asset class needs some upkeep? Why not bin it off for all real estate then, rather than just first homes?
We all pay council tax.
FWIW, I’m not in favour, unless the tax rate was introduced at a low level eg 5% and gradually increased so the behavioural impacts happen smoothly over time. Introducing a tax of - say 40% - to apply from “Day 1” would cause an almighty disruption to the housing market in an attempt to crystallise gains on it before “Day 0”.
And as others have said, the tax would fundamentally distort the housing market with who knows what consequences?
If one wants more tax revenue then income tax is the way to go. Simple. Well understood. And reasonably “fair” in that higher rates only apply on income above a threshold.
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True but there are considerable deductions (expenses and interest) at the corporate level before Corp tax is applied. Dividend recipient ends up paying their marginal rate of income in excess of the corp tax that has been deducted I believe.TheBigBean said:
When you distribute the proceeds out the company that owns property to an individual it gets taxed. When you sell shares in the company at a profit... it gets taxed.wallace_and_gromit said:
If you operate a commercial property company then you get tax relief on interest payments and legitimate expenses, so if you tax “profits” on primary residences then taxing (sale price less purchase price) does seem unduly harsh.rick_chasey said:
I don’t really see how that’s relevant.pangolin said:
What is the profit do you think? You mentioned the headline figures but no info on mortgage cost, renovations, council tax, etc etc.rick_chasey said:
Nonsense. Wealth is wealth. If you chose to tie it up in illiquid assets that’s your business.surrey_commuter said:
You are moving the goalposts. There is no wayyou consider living in a house that you own outright worth £500k is incredibly wealthy.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Incredibly wealthy is millions in disposable assets
I could have chosen someone who bought a house in Fulham in the early 90s and it would be 3x more profit.
Because the person may or may not have had to lever up to buy it matters if they have to pay cgt?
Or because this asset class needs some upkeep? Why not bin it off for all real estate then, rather than just first homes?
We all pay council tax.
FWIW, I’m not in favour, unless the tax rate was introduced at a low level eg 5% and gradually increased so the behavioural impacts happen smoothly over time. Introducing a tax of - say 40% - to apply from “Day 1” would cause an almighty disruption to the housing market in an attempt to crystallise gains on it before “Day 0”.
And as others have said, the tax would fundamentally distort the housing market with who knows what consequences?
If one wants more tax revenue then income tax is the way to go. Simple. Well understood. And reasonably “fair” in that higher rates only apply on income above a threshold.
Gains on share sales benefit from an annual cgt allowance too. £6k per person per year currently, which would add up to a lot over the 20 years one might live as a family in a family sized home before selling up to downsize.
In fact, the taxman might owe us!
Maybe the way to go is that everyone has an annual property value increase allowance. So anyone rattling round solo in a massive house pays more tax over the same ownership period than a family of four, all other things equal.
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So let's say he gets a 40% equity release of £200k and no other income - he gets, what, 10 years if he's frugal. How old is he?rick_chasey said:
No need. He can line up his equity release, and live off that.rjsterry said:
That £500k is just an estimate of what he could sell the property for. And then he'd need to buy another, which will cost him about £500k unless he wants to take out a new mortgage. So none of that will end up in his account for more than a few hours at most. There are almost no properties in the UK that can be bought for £70k.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Pretty good return on your home right?rjsterry said:
So let's say he gets a 40% equity release of £200k and no other income - he gets, what, 10 years if he's frugal. How old is he?rick_chasey said:
No need. He can line up his equity release, and live off that.rjsterry said:
That £500k is just an estimate of what he could sell the property for. And then he'd need to buy another, which will cost him about £500k unless he wants to take out a new mortgage. So none of that will end up in his account for more than a few hours at most. There are almost no properties in the UK that can be bought for £70k.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Wealth is wealth, regardless of what it’s tied up in.0 -
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What's the rationale for taxing property more than the growth in your pension, say. Is that not wealth?rick_chasey said:
Pretty good return on your home right?rjsterry said:
So let's say he gets a 40% equity release of £200k and no other income - he gets, what, 10 years if he's frugal. How old is he?rick_chasey said:
No need. He can line up his equity release, and live off that.rjsterry said:
That £500k is just an estimate of what he could sell the property for. And then he'd need to buy another, which will cost him about £500k unless he wants to take out a new mortgage. So none of that will end up in his account for more than a few hours at most. There are almost no properties in the UK that can be bought for £70k.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Wealth is wealth, regardless of what it’s tied up in.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Because the pension exemption is specifically designed to promote savings because people otherwise tend to not save enough for retirement.rjsterry said:
What's the rationale for taxing property more than the growth in your pension, say. Is that not wealth?rick_chasey said:
Pretty good return on your home right?rjsterry said:
So let's say he gets a 40% equity release of £200k and no other income - he gets, what, 10 years if he's frugal. How old is he?rick_chasey said:
No need. He can line up his equity release, and live off that.rjsterry said:
That £500k is just an estimate of what he could sell the property for. And then he'd need to buy another, which will cost him about £500k unless he wants to take out a new mortgage. So none of that will end up in his account for more than a few hours at most. There are almost no properties in the UK that can be bought for £70k.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Wealth is wealth, regardless of what it’s tied up in.
If I just stick £10k in a fund and I get returns I pay CGT on it.
I can stick it in a ISA because again that’s designed to promote saving.0 -
Incredibly wealthy indeed.rjsterry said:
So let's say he gets a 40% equity release of £200k and no other income - he gets, what, 10 years if he's frugal. How old is he?rick_chasey said:
No need. He can line up his equity release, and live off that.rjsterry said:
That £500k is just an estimate of what he could sell the property for. And then he'd need to buy another, which will cost him about £500k unless he wants to take out a new mortgage. So none of that will end up in his account for more than a few hours at most. There are almost no properties in the UK that can be bought for £70k.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.- Genesis Croix de Fer
- Dolan Tuono0 -
Pretty good considering it’s just capital gain. Not like he worked for it.pangolin said:
Incredibly wealthy indeed.rjsterry said:
So let's say he gets a 40% equity release of £200k and no other income - he gets, what, 10 years if he's frugal. How old is he?rick_chasey said:
No need. He can line up his equity release, and live off that.rjsterry said:
That £500k is just an estimate of what he could sell the property for. And then he'd need to buy another, which will cost him about £500k unless he wants to take out a new mortgage. So none of that will end up in his account for more than a few hours at most. There are almost no properties in the UK that can be bought for £70k.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
It is ridiculous that over a 5 year period I probably added my annual gross salary to my wealth just by living in the house I borrowed loads to buy.
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So if a reduced tax on certain capital gains promotes saving, I think it's fairly likely that an increased tax on other capital gains will have a similar but inverse effect. People will find ways to avoid it as sure as water finds a leak.rick_chasey said:
Because the pension exemption is specifically designed to promote savings because people otherwise tend to not save enough for retirement.rjsterry said:
What's the rationale for taxing property more than the growth in your pension, say. Is that not wealth?rick_chasey said:
Pretty good return on your home right?rjsterry said:
So let's say he gets a 40% equity release of £200k and no other income - he gets, what, 10 years if he's frugal. How old is he?rick_chasey said:
No need. He can line up his equity release, and live off that.rjsterry said:
That £500k is just an estimate of what he could sell the property for. And then he'd need to buy another, which will cost him about £500k unless he wants to take out a new mortgage. So none of that will end up in his account for more than a few hours at most. There are almost no properties in the UK that can be bought for £70k.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Wealth is wealth, regardless of what it’s tied up in.
If I just stick £10k in a fund and I get returns I pay CGT on it.
I can stick it in a ISA because again that’s designed to promote saving.
So are you trying to stop property from appreciating or tax the middle classes more or what?1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
I just think a lot of people make a lot of money out of it and so it should be taxed like anything else.
Unless anyone can bring up evidence from those countries that do have CGT on owner occupied houses that their markets are distorted I don’t think it’s a good argument - not least as we have it in a tonne of other markets and it works fine.
And it’s fairer on people who can’t afford to buy their house and have to rent.0 -
In general living in your property is not really the kind of investment we collectively want to aspire to.
It’s not very productive and the obsession with protecting the value of the house creates all sorts of NIMBY incentives and it ultimately contributes to a higher cost of living.
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Why not do both? Would attract more of the wealthy back (as the IHT abolition did) where they can pay taxes on everything else. Worked once.kingstongraham said:
You don't think it's possible the presence of CGT on the main residence (which is more difficult to avoid) makes it more straightforward to abolish inheritance tax?Stevo_666 said:
Taxation of main residences is pretty uncommon even in the normally tax hungry EU. Which should tell you how poor an idea it is. The Swedes don't get everything right.kingstongraham said:
Tell me about Sweden's capital gains tax on sales of property.Stevo_666 said:
See above. It is likely to be counter productive, like your misplaced wealth tax ideas.rick_chasey said:
Why would it be tax on moving, if when you die it's set at the same rate? It would just be a tax on capital gains, regardless.First.Aspect said:
If you whack 40% gct on primary residence, this will be more or less 40% tax on moving house for a lot of people, and make downsizing quite hard to do, unless downsizing a lot.TheBigBean said:
The tax wouldn't be avoided by death, so wouldn't be part of the estate. Therefore not moving only delays the payment.Stevo_666 said:
I reckon you're right about the last bitTheBigBean said:
All circumstances, good question and sounds reasonable. I'd probably go with the retroactive option and bring it in with immediate effect to avoid chaos.Stevo_666 said:
Setting aside the probability of this ever happening for a moment:-TheBigBean said:
I like the idea of removing CGT relief on main residences.Jezyboy said:
Banks will lend more money to higher earners. Not that shocking is it?rick_chasey said:
I like the idea of CGT for assistance swap though.
- Is this in exchange for mortgage relief, or do you just want to remove the exemption regardless?
- Would this be effective from when implemented (i.e only gains after the implementation date are taxable), or would this be retroactive to whenever the property was bought?
- And if a gain is taxable, does a loss on sale of a main residence create a tax loss that can be used against future gains? (i.e. the normal rule for CGT).
I would generously allow roll over relief though.
I won't be elected.
The problem I can see is that all these lone pensioners in big houses will probably never sell up if they are going to get a massive tax bill, which kind of puts a spanner in Rick's plan to let young families get their hands on these properties for the greater good.
All that will do is choke supply in the middle and upper ends of the market and raise prices.
Discuss.
A quick reminder of the real life experience of Sweden when it abolished IHT and increased the tax take:
https://telegraph.co.uk/tax/news/sweden-ditched-inheritance-tax-business-boom/
So if you want to increase the overall, tax take, what would you do?
And after a bit more research, Sweden is the outlier in terms of taxing main residence sales in Europe (Spain and Portugal do but allow relief for reinvestment in another property). If it was such a good idea, why do you think other countries haven't done it?"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
I am almost certain wine is CGT exempt as a wasting chattel.0
-
You don't need to go abroad to see how the clumsy implementation of the various property tax changes screwed around with the property market.rick_chasey said:I just think a lot of people make a lot of money out of it and so it should be taxed like anything else.
Unless anyone can bring up evidence from those countries that do have CGT on owner occupied houses that their markets are distorted I don’t think it’s a good argument - not least as we have it in a tonne of other markets and it works fine.
And it’s fairer on people who can’t afford to buy their house and have to rent.
And how is it fairer. There's no rebalancing. You're just suggesting that a certain section of the population get taxed more. Tenants have none of the maintenance liabilities associated with property.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
You were the one who brought Sweden into this irrelevant discussion.Stevo_666 said:
Why not do both? Would attract more of the wealthy back (as the IHT abolition did) where they can pay taxes on everything else. Worked once.kingstongraham said:
You don't think it's possible the presence of CGT on the main residence (which is more difficult to avoid) makes it more straightforward to abolish inheritance tax?Stevo_666 said:
Taxation of main residences is pretty uncommon even in the normally tax hungry EU. Which should tell you how poor an idea it is. The Swedes don't get everything right.kingstongraham said:
Tell me about Sweden's capital gains tax on sales of property.Stevo_666 said:
See above. It is likely to be counter productive, like your misplaced wealth tax ideas.rick_chasey said:
Why would it be tax on moving, if when you die it's set at the same rate? It would just be a tax on capital gains, regardless.First.Aspect said:
If you whack 40% gct on primary residence, this will be more or less 40% tax on moving house for a lot of people, and make downsizing quite hard to do, unless downsizing a lot.TheBigBean said:
The tax wouldn't be avoided by death, so wouldn't be part of the estate. Therefore not moving only delays the payment.Stevo_666 said:
I reckon you're right about the last bitTheBigBean said:
All circumstances, good question and sounds reasonable. I'd probably go with the retroactive option and bring it in with immediate effect to avoid chaos.Stevo_666 said:
Setting aside the probability of this ever happening for a moment:-TheBigBean said:
I like the idea of removing CGT relief on main residences.Jezyboy said:
Banks will lend more money to higher earners. Not that shocking is it?rick_chasey said:
I like the idea of CGT for assistance swap though.
- Is this in exchange for mortgage relief, or do you just want to remove the exemption regardless?
- Would this be effective from when implemented (i.e only gains after the implementation date are taxable), or would this be retroactive to whenever the property was bought?
- And if a gain is taxable, does a loss on sale of a main residence create a tax loss that can be used against future gains? (i.e. the normal rule for CGT).
I would generously allow roll over relief though.
I won't be elected.
The problem I can see is that all these lone pensioners in big houses will probably never sell up if they are going to get a massive tax bill, which kind of puts a spanner in Rick's plan to let young families get their hands on these properties for the greater good.
All that will do is choke supply in the middle and upper ends of the market and raise prices.
Discuss.
A quick reminder of the real life experience of Sweden when it abolished IHT and increased the tax take:
https://telegraph.co.uk/tax/news/sweden-ditched-inheritance-tax-business-boom/
So if you want to increase the overall, tax take, what would you do?
And after a bit more research, Sweden is the outlier in terms of taxing main residence sales in Europe (Spain and Portugal do but allow relief for reinvestment in another property). If it was such a good idea, why do you think other countries haven't done it?0 -
Read that back to yourself and have a think about what a house is fundamentally for because it sounds like you have somewhat lost sight of that. Having spent more than two decades dealing with people's houses and their neighbours, property value is not the primary driver for Nimbyism.rick_chasey said:In general living in your property is not really the kind of investment we collectively want to aspire to.
It’s not very productive and the obsession with protecting the value of the house creates all sorts of NIMBY incentives and it ultimately contributes to a higher cost of living.
High values are a function of lack of supply arising from decades of low levels of housebuilding.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Anyway, back on topic.
Actually stunned by that Risk Assessment grid that was shown in the Covid Inquiry.
I wonder I can get away with just don't know or nothing at all in the boxes.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
The argument re "distortion" is more related to unintended consequences from a sudden change to the tax / regulatory regimes. People adjust to a stable regime. So house-owing tendencies in countries with different regimes are different. A step-change in the UK regime would "distort" the UK market for a few years until the new equilibrium established. That new equilibrium may or may not achieve what it was intended to achieve (*) and there will definitely be winners and loser along the way.rick_chasey said:I just think a lot of people make a lot of money out of it and so it should be taxed like anything else.
Unless anyone can bring up evidence from those countries that do have CGT on owner occupied houses that their markets are distorted I don’t think it’s a good argument - not least as we have it in a tonne of other markets and it works fine.
And it’s fairer on people who can’t afford to buy their house and have to rent.
(*) Many major tax and regulatory changes don't have the desired impact. For example:
- Housing benefit seems to subsidise private landlords at the taxpayer's expense
- Working tax-credits seem to subsidise employers paying low wages at the tax payer's expense
- The pensions triple lock seems to be promoting "inter-generation unfairness" in the current inflationary environment rather than protecting near-destitute pensioners
- The National Minimum Wage increases are apparently helping to drive inflation, which may collectively be a bigger problem at the moment than the low prevailing pay rates in some industries.
0 -
Unless you sell up and move to a location that has experienced lower house price growth recently than your area, you're not wealthier in terms of purchasing power. If you're sitting on £200k of equity due to house price inflation then you'll need to spend that on a similar house in your current location. And if you relocate to such an area, you'll likely not be able to do your current job and will end up earning less.rick_chasey said:
Pretty good considering it’s just capital gain. Not like he worked for it.pangolin said:
Incredibly wealthy indeed.rjsterry said:
So let's say he gets a 40% equity release of £200k and no other income - he gets, what, 10 years if he's frugal. How old is he?rick_chasey said:
No need. He can line up his equity release, and live off that.rjsterry said:
That £500k is just an estimate of what he could sell the property for. And then he'd need to buy another, which will cost him about £500k unless he wants to take out a new mortgage. So none of that will end up in his account for more than a few hours at most. There are almost no properties in the UK that can be bought for £70k.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
It is ridiculous that over a 5 year period I probably added my annual gross salary to my wealth just by living in the house I borrowed loads to buy.
"Downsizing" is a potential way to realise your wealth, but that's many years in the future for you and is probably of more benefit to estate agents etc. than you, unless you move to a significantly smaller house. We've looked at downsizing and the costs, including stamp duty, are eye-watering. So we're staying put. Though other factors such as it being good to have room to accommodate offspring and their friends during Uni holidays are also significant in this decision.1 -
So why are you pushing the point?kingstongraham said:
You were the one who brought Sweden into this irrelevant discussion.Stevo_666 said:
Why not do both? Would attract more of the wealthy back (as the IHT abolition did) where they can pay taxes on everything else. Worked once.kingstongraham said:
You don't think it's possible the presence of CGT on the main residence (which is more difficult to avoid) makes it more straightforward to abolish inheritance tax?Stevo_666 said:
Taxation of main residences is pretty uncommon even in the normally tax hungry EU. Which should tell you how poor an idea it is. The Swedes don't get everything right.kingstongraham said:
Tell me about Sweden's capital gains tax on sales of property.Stevo_666 said:
See above. It is likely to be counter productive, like your misplaced wealth tax ideas.rick_chasey said:
Why would it be tax on moving, if when you die it's set at the same rate? It would just be a tax on capital gains, regardless.First.Aspect said:
If you whack 40% gct on primary residence, this will be more or less 40% tax on moving house for a lot of people, and make downsizing quite hard to do, unless downsizing a lot.TheBigBean said:
The tax wouldn't be avoided by death, so wouldn't be part of the estate. Therefore not moving only delays the payment.Stevo_666 said:
I reckon you're right about the last bitTheBigBean said:
All circumstances, good question and sounds reasonable. I'd probably go with the retroactive option and bring it in with immediate effect to avoid chaos.Stevo_666 said:
Setting aside the probability of this ever happening for a moment:-TheBigBean said:
I like the idea of removing CGT relief on main residences.Jezyboy said:
Banks will lend more money to higher earners. Not that shocking is it?rick_chasey said:
I like the idea of CGT for assistance swap though.
- Is this in exchange for mortgage relief, or do you just want to remove the exemption regardless?
- Would this be effective from when implemented (i.e only gains after the implementation date are taxable), or would this be retroactive to whenever the property was bought?
- And if a gain is taxable, does a loss on sale of a main residence create a tax loss that can be used against future gains? (i.e. the normal rule for CGT).
I would generously allow roll over relief though.
I won't be elected.
The problem I can see is that all these lone pensioners in big houses will probably never sell up if they are going to get a massive tax bill, which kind of puts a spanner in Rick's plan to let young families get their hands on these properties for the greater good.
All that will do is choke supply in the middle and upper ends of the market and raise prices.
Discuss.
A quick reminder of the real life experience of Sweden when it abolished IHT and increased the tax take:
https://telegraph.co.uk/tax/news/sweden-ditched-inheritance-tax-business-boom/
So if you want to increase the overall, tax take, what would you do?
And after a bit more research, Sweden is the outlier in terms of taxing main residence sales in Europe (Spain and Portugal do but allow relief for reinvestment in another property). If it was such a good idea, why do you think other countries haven't done it?
Although I see you can't answer my question."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
See my post above about how rare how rare the taxation of owner occupied property is. Can you think why it is so uncommon, even the relatively tax hungry countries of Europe?rick_chasey said:I just think a lot of people make a lot of money out of it and so it should be taxed like anything else.
Unless anyone can bring up evidence from those countries that do have CGT on owner occupied houses that their markets are distorted I don’t think it’s a good argument - not least as we have it in a tonne of other markets and it works fine.
And it’s fairer on people who can’t afford to buy their house and have to rent."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Something tells me that Rick doesn't like other people making money in ways that he doesn't approve of. Which is kind of tough, because the rules are extremely unlikely to change here.rjsterry said:
So if a reduced tax on certain capital gains promotes saving, I think it's fairly likely that an increased tax on other capital gains will have a similar but inverse effect. People will find ways to avoid it as sure as water finds a leak.rick_chasey said:
Because the pension exemption is specifically designed to promote savings because people otherwise tend to not save enough for retirement.rjsterry said:
What's the rationale for taxing property more than the growth in your pension, say. Is that not wealth?rick_chasey said:
Pretty good return on your home right?rjsterry said:
So let's say he gets a 40% equity release of £200k and no other income - he gets, what, 10 years if he's frugal. How old is he?rick_chasey said:
No need. He can line up his equity release, and live off that.rjsterry said:
That £500k is just an estimate of what he could sell the property for. And then he'd need to buy another, which will cost him about £500k unless he wants to take out a new mortgage. So none of that will end up in his account for more than a few hours at most. There are almost no properties in the UK that can be bought for £70k.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Wealth is wealth, regardless of what it’s tied up in.
If I just stick £10k in a fund and I get returns I pay CGT on it.
I can stick it in a ISA because again that’s designed to promote saving.
So are you trying to stop property from appreciating or tax the middle classes more or what?"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Could be something to do with most of them having inheritance tax or property tax.Stevo_666 said:
So why are you pushing the point?kingstongraham said:
You were the one who brought Sweden into this irrelevant discussion.Stevo_666 said:
Why not do both? Would attract more of the wealthy back (as the IHT abolition did) where they can pay taxes on everything else. Worked once.kingstongraham said:
You don't think it's possible the presence of CGT on the main residence (which is more difficult to avoid) makes it more straightforward to abolish inheritance tax?Stevo_666 said:
Taxation of main residences is pretty uncommon even in the normally tax hungry EU. Which should tell you how poor an idea it is. The Swedes don't get everything right.kingstongraham said:
Tell me about Sweden's capital gains tax on sales of property.Stevo_666 said:
See above. It is likely to be counter productive, like your misplaced wealth tax ideas.rick_chasey said:
Why would it be tax on moving, if when you die it's set at the same rate? It would just be a tax on capital gains, regardless.First.Aspect said:
If you whack 40% gct on primary residence, this will be more or less 40% tax on moving house for a lot of people, and make downsizing quite hard to do, unless downsizing a lot.TheBigBean said:
The tax wouldn't be avoided by death, so wouldn't be part of the estate. Therefore not moving only delays the payment.Stevo_666 said:
I reckon you're right about the last bitTheBigBean said:
All circumstances, good question and sounds reasonable. I'd probably go with the retroactive option and bring it in with immediate effect to avoid chaos.Stevo_666 said:
Setting aside the probability of this ever happening for a moment:-TheBigBean said:
I like the idea of removing CGT relief on main residences.Jezyboy said:
Banks will lend more money to higher earners. Not that shocking is it?rick_chasey said:
I like the idea of CGT for assistance swap though.
- Is this in exchange for mortgage relief, or do you just want to remove the exemption regardless?
- Would this be effective from when implemented (i.e only gains after the implementation date are taxable), or would this be retroactive to whenever the property was bought?
- And if a gain is taxable, does a loss on sale of a main residence create a tax loss that can be used against future gains? (i.e. the normal rule for CGT).
I would generously allow roll over relief though.
I won't be elected.
The problem I can see is that all these lone pensioners in big houses will probably never sell up if they are going to get a massive tax bill, which kind of puts a spanner in Rick's plan to let young families get their hands on these properties for the greater good.
All that will do is choke supply in the middle and upper ends of the market and raise prices.
Discuss.
A quick reminder of the real life experience of Sweden when it abolished IHT and increased the tax take:
https://telegraph.co.uk/tax/news/sweden-ditched-inheritance-tax-business-boom/
So if you want to increase the overall, tax take, what would you do?
And after a bit more research, Sweden is the outlier in terms of taxing main residence sales in Europe (Spain and Portugal do but allow relief for reinvestment in another property). If it was such a good idea, why do you think other countries haven't done it?
Although I see you can't answer my question.
You've chosen one tax in one country because the Telegraph highlighted it.
I'm not sure how they have directly related the increase in overall tax revenue to removing this tax. Any detail on that? I'm sure it wasn't the only thing they've done.0 -
I'm also not clear what the end goal is.Stevo_666 said:
Something tells me that Rick doesn't like other people making money in ways that he doesn't approve of. Which is kind of tough, because the rules are extremely unlikely to change here.rjsterry said:
So if a reduced tax on certain capital gains promotes saving, I think it's fairly likely that an increased tax on other capital gains will have a similar but inverse effect. People will find ways to avoid it as sure as water finds a leak.rick_chasey said:
Because the pension exemption is specifically designed to promote savings because people otherwise tend to not save enough for retirement.rjsterry said:
What's the rationale for taxing property more than the growth in your pension, say. Is that not wealth?rick_chasey said:
Pretty good return on your home right?rjsterry said:
So let's say he gets a 40% equity release of £200k and no other income - he gets, what, 10 years if he's frugal. How old is he?rick_chasey said:
No need. He can line up his equity release, and live off that.rjsterry said:
That £500k is just an estimate of what he could sell the property for. And then he'd need to buy another, which will cost him about £500k unless he wants to take out a new mortgage. So none of that will end up in his account for more than a few hours at most. There are almost no properties in the UK that can be bought for £70k.rick_chasey said:
Err yes.rjsterry said:
Almost none of them on the basis of their own home. You're thinking of landlords.rick_chasey said:Buying and selling stuff that appreciates or depreciates in value is investment and the realisation of said investment, end of.
I'd like to see you argue to the tax man you only bought shares in barclays because their AGM is the best social event of the year for you, and you only sold them because you needed the money to pay for your heating, so because you didn't *mean* for it to be an investment, it doesn't count.
A lot of people have got incredibility wealthy from their real estate investments.
My neighbour bought his house for £70k in the 90s. It's now worth £500k.
He's been mortgage free since the 00s. That's so remarkable in fact, he gave up working early because the little bits he does on the side cover his food and heating costs etc.
Wealth is wealth, regardless of what it’s tied up in.
If I just stick £10k in a fund and I get returns I pay CGT on it.
I can stick it in a ISA because again that’s designed to promote saving.
So are you trying to stop property from appreciating or tax the middle classes more or what?
Increasing revenues? Not going to move the needle much. The whole of CGT receipts was £18bn.
Reducing house price inflation? That's caused by restriction of supply.
There's an appeal to the simplicity of taxing all gains at the same rate but that implies the removal of SDLT, which goes against the first aim.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0
