How Far Will House Prices Fall? [Volume 6]
Discussion
skwdenyer said:
loafer123 said:
Not quite as simple as that… fair market value x a ratio based on nature of property x tax rate.
They also pay less personal taxes instead.
Paying 1% of property value as an additional tax raising measure would be painful for those with high property values and low income, and it would be unwise for any politician to do that in the U.K., let alone grannies in Kentish Town.
Unwise for anyone without either (a) a very large majority and/or (b) less reliance on the retired vote. CGT on principal residences, scrap SDLT (pay tax on actual gains, not transaction price / potential gains), annual assessed property tax and, yes, rebalance income taxes to match.They also pay less personal taxes instead.
Paying 1% of property value as an additional tax raising measure would be painful for those with high property values and low income, and it would be unwise for any politician to do that in the U.K., let alone grannies in Kentish Town.
How about allow an average annual uplift after inflation?
That way you say average persons house at average house value in region X goes up at say 2% a year, after 10 years that’s 22%
So let’s say £300k to £366k so a £66k gain is neutral.
Zero tax.
£600k house to £732k, then you’ve got a £66k exposure.
Tax however society deems fit?
If you make a loss, offset against SDLT?
Lots of ways to try make the system ‘fairer’
But the fundamental issue is built-in protectionism.
Governments and LAs make houses the prized possessions they are.
They could bring values down to sensible levels easily but they don’t because people see them as assets… but they only are for people who own more than one.
For everyone else they’re simply the roof over the heads and the absolute value is irrelevant, only relative value matters.
Earthdweller said:
Would the CGT take that into account?
CGT on primary residences just wouldn’t raise anywhere near as much money as people think….basically any work that increases the value of the house would be allowable. Eg extension, kitchen…you could also argue that a new roof or a new boiler might do so too.
Cheib said:
Earthdweller said:
Would the CGT take that into account?
CGT on primary residences just wouldn’t raise anywhere near as much money as people think….basically any work that increases the value of the house would be allowable. Eg extension, kitchen…you could also argue that a new roof or a new boiler might do so too.
Where was the argument against the ending of taper relief? Who argued against the steady reduction of the CGT allowance over the last decade?
Big increases are incoming and they'll be focused on those people who aren't core Labour supporters.
Edited by Unreal on Monday 17th June 09:33
Unreal said:
People can argue what they like. If the government change the law, HMRC will enforce it.
Where was the argument against the ending of taper relief? Who argued against the steady reduction of the CGT allowance over the last decade?
Big increases are incoming and they'll be focused on those people who aren't core Labour supporters.
I've recently argued this point on labours plans with school fees. Where was the argument against the ending of taper relief? Who argued against the steady reduction of the CGT allowance over the last decade?
Big increases are incoming and they'll be focused on those people who aren't core Labour supporters.
Edited by Unreal on Monday 17th June 09:33
If they make the change then I can't see how it can be challenged but maybe I'm wrong ?
GT3Manthey said:
I've recently argued this point on labours plans with school fees.
If they make the change then I can't see how it can be challenged but maybe I'm wrong ?
In relation to that there will likely be some discourse on what education is not exempt and what constitutes being a charity. There’s also the question of provision of education to those that will need to move to state, which I believe is a human right. These are all areas for debate the legal sector will be dining out on in due course I expect.If they make the change then I can't see how it can be challenged but maybe I'm wrong ?
There isn’t much to challenge with CGT on primary residences other than ‘not fair because it affects me’. Personally I cant see it happening as its too messy and political suicide. It’ll be pensions, for newcomers of course, that’ll get hit. And CT again. Meanwhile triple lock…
M1AGM said:
GT3Manthey said:
I've recently argued this point on labours plans with school fees.
If they make the change then I can't see how it can be challenged but maybe I'm wrong ?
In relation to that there will likely be some discourse on what education is not exempt and what constitutes being a charity. There’s also the question of provision of education to those that will need to move to state, which I believe is a human right. These are all areas for debate the legal sector will be dining out on in due course I expect.If they make the change then I can't see how it can be challenged but maybe I'm wrong ?
There isn’t much to challenge with CGT on primary residences other than ‘not fair because it affects me’. Personally I cant see it happening as its too messy and political suicide. It’ll be pensions, for newcomers of course, that’ll get hit. And CT again. Meanwhile triple lock…
I agree it is politically tricky to put CGT, introduce proper annual property taxes, etc. Instead we just keep heaping property taxes on businesses, which is a major impediment to growth, and then exempting a whole bunch of them (creating lots of artificial cliff-edges for people to avoid).
We need some honesty in the debate, something sadly lacking from almost all parties.
skwdenyer said:
CGT on principal residences would help to tax existing property wealth. Hitting pensions even further will destroy working-age people. Nobody with economic literacy should be considering the two measures in the same breath.
I agree it is politically tricky to put CGT, introduce proper annual property taxes, etc. Instead we just keep heaping property taxes on businesses, which is a major impediment to growth, and then exempting a whole bunch of them (creating lots of artificial cliff-edges for people to avoid).
We need some honesty in the debate, something sadly lacking from almost all parties.
Much as I agree, how would you go about running the valuations to arrive at the figures for an annual property tax on x million homes each year? And how would spend on the property be taken into account? My house is worth more than double what zoopla thinks it is because I have spent 3 years gutting and rebuilding it. How would that work? I just see it as unworkable considering how inept they all are.I agree it is politically tricky to put CGT, introduce proper annual property taxes, etc. Instead we just keep heaping property taxes on businesses, which is a major impediment to growth, and then exempting a whole bunch of them (creating lots of artificial cliff-edges for people to avoid).
We need some honesty in the debate, something sadly lacking from almost all parties.
M1AGM said:
In relation to that there will likely be some discourse on what education is not exempt and what constitutes being a charity. There’s also the question of provision of education to those that will need to move to state, which I believe is a human right. These are all areas for debate the legal sector will be dining out on in due course I expect.
There isn’t much to challenge with CGT on primary residences other than ‘not fair because it affects me’. Personally I cant see it happening as its too messy and political suicide. It’ll be pensions, for newcomers of course, that’ll get hit. And CT again. Meanwhile triple lock…
Tks . I just can't see if the elected government bring the VAT charge in you can contest it, much like other changes on tax. There isn’t much to challenge with CGT on primary residences other than ‘not fair because it affects me’. Personally I cant see it happening as its too messy and political suicide. It’ll be pensions, for newcomers of course, that’ll get hit. And CT again. Meanwhile triple lock…
Not a popular comment but you could say the fees have been at a 20% discount that some of us have enjoyed.
ooid said:
Loads of reasons. It is simply a dynamic, a person who simply buys with large equity (or debt) somewhere probably will appreciate in capital, takes a risk. That risk might actually wipe down their investment too in the near or long term future, if values (simply because of supply/ demand dynamics) drops. The risk you take should come with a reward. The moment you tax that risk, disrupting the natural market dynamics.
Not even mentioning the possible bad effects on the multipliers on transactions such as solicitors, surveyors, builders and etc..
It is really getting quite unpleasant to make many home-owners in whatever the area that highly appreciated in the last 20 years, turning into some sort of monster. They just bought a house, paid £££ mortgage, live in it, fixed it, invested in the area and etc... if it has appreciated a lot, they will sell move on gift whatever they want to do, should we leave people alone ?
Are you also in favour of natural market dynamics like building on the green belt?Not even mentioning the possible bad effects on the multipliers on transactions such as solicitors, surveyors, builders and etc..
It is really getting quite unpleasant to make many home-owners in whatever the area that highly appreciated in the last 20 years, turning into some sort of monster. They just bought a house, paid £££ mortgage, live in it, fixed it, invested in the area and etc... if it has appreciated a lot, they will sell move on gift whatever they want to do, should we leave people alone ?
princeperch said:
I think my rather more modest victorian terrace in Leytonstone was worth about 40 to 50k back in 96/97. I sold that 2 years ago for just over 700k.this Edwardian im Wanstead is worth something approaching double that.
My wife (then fiance) and I paid £58k for a 3 bed semi in Sheffield in 95!Maybe worth £350-£400k now?
GreatGranny said:
princeperch said:
I think my rather more modest victorian terrace in Leytonstone was worth about 40 to 50k back in 96/97. I sold that 2 years ago for just over 700k.this Edwardian im Wanstead is worth something approaching double that.
My wife (then fiance) and I paid £58k for a 3 bed semi in Sheffield in 95!Maybe worth £350-£400k now?
It is those historically gritty areas that have seen the most insane rises.
I’m buying a house that apparently has averaged 8% growth per year from 1998 to now. Mad.
But it’s not done anything like those numbers mentioned in Leystonstone as I assume the area has been nice for a long time.
I’m buying a house that apparently has averaged 8% growth per year from 1998 to now. Mad.
But it’s not done anything like those numbers mentioned in Leystonstone as I assume the area has been nice for a long time.
okgo said:
It is those historically gritty areas that have seen the most insane rises.
I
If CGT was applied back than, those areas would have never got better like today. It is a natural incentive for people to buy in those affordable areas and improve the boroughs incrementally with new communities (not a little help from government).I
I personally saw the improvement in East over the years, and unlike many assumptions, most owners were young professionals (teachers, lawyers, engineers and etc...)
Earthdweller said:
I know Leytonstone was a bit grim back in the 90’s but I think that houses were worth more than that back then, I was living round there then and bought a 2 bed terrace not a million miles away for £67k in 94, 3 beds iirc were over £100k iirc
This is my old road. The houses were cheap in the 90s but it was in the rough end. My old neighbours house in the same road was sold for 310 quid in 1957!
£310. 
I remember the house I grew up in SW London between Wimbledon and Putney, end of terrace, 2.5 up and 2 down with a small kitchen, absolutely knackered so much so that when they bought it in 1979, during the mortgage drought, for £11k there was IIRC about £4k retention until vital works were carried out. Luckily, unlike me - I can barely hammer a nail into a wall - my very recently late Dad could do almost everything himself and what he couldn’t do my uncle could do. I think it took them a few years of weekend work to get the whole thing in shape. Then built a small extension, carved up a bedroom to put a very small en-suite in etc.
Anyway, they sold the place in 1997 for £210k. These days the same houses (most with loft extensions and open plan kitchens which take up most of the tiny gardens) are changing hands for £1.3.-1.5m. It was never a rough area although there were a few dodgy council estates not too far away. I was only saying to him recently, if only you’d kept it, and he said, bright as a button, yeah but I’d have had to have lived in it all these years.
You’d have to really badly need or want to be on the District Line to pay those sort of prices for a 1600sq ft ish (inc loft and blown out kitchen), on street parking, and almost no outside space and within spitting distance of loads of neighbours with equally tiny gardens and loft extensions.
I remember the house I grew up in SW London between Wimbledon and Putney, end of terrace, 2.5 up and 2 down with a small kitchen, absolutely knackered so much so that when they bought it in 1979, during the mortgage drought, for £11k there was IIRC about £4k retention until vital works were carried out. Luckily, unlike me - I can barely hammer a nail into a wall - my very recently late Dad could do almost everything himself and what he couldn’t do my uncle could do. I think it took them a few years of weekend work to get the whole thing in shape. Then built a small extension, carved up a bedroom to put a very small en-suite in etc.
Anyway, they sold the place in 1997 for £210k. These days the same houses (most with loft extensions and open plan kitchens which take up most of the tiny gardens) are changing hands for £1.3.-1.5m. It was never a rough area although there were a few dodgy council estates not too far away. I was only saying to him recently, if only you’d kept it, and he said, bright as a button, yeah but I’d have had to have lived in it all these years.
You’d have to really badly need or want to be on the District Line to pay those sort of prices for a 1600sq ft ish (inc loft and blown out kitchen), on street parking, and almost no outside space and within spitting distance of loads of neighbours with equally tiny gardens and loft extensions.
Edited by Diderot on Tuesday 18th June 18:56
M1AGM said:
Much as I agree, how would you go about running the valuations to arrive at the figures for an annual property tax on x million homes each year? And how would spend on the property be taken into account? My house is worth more than double what zoopla thinks it is because I have spent 3 years gutting and rebuilding it. How would that work? I just see it as unworkable considering how inept they all are.
This is why I think they’ll introduce it graduallyThey’ll introduce a “super band” of properties valued at >£1M, perhaps applying a tax above that threshold.
They’ll identify/value based on
- Scraping zoopla and the land registry
- Telling owners they can appeal the valuation, but if the appeal is unsuccessful then you’re liable for all surveyor costs
- Creating a declaration obligation, with hefty back-tax penalties for those who later sell for >£1M and who didn’t declare earlier
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