Prices won't go down for expensive properties. They will go up. The tax cost will be incorporated into the overall price of the property. It will just fuel the bubble and make the burst much more devastating.(Original post by paddyman4)
So Ed Milliband plans to tax everyone who owns a property over £2million. Judging by estimates of how many of these properties exist in the UK and how much Ed reckons he can make per year, this will be an average of around £12000 a year.
I disagree with the principle, see here if interested:
Work hard in school, do well; work hard to get into a good uni, work hard in uni, do well again; work hard to get a good job, do well again; work hard in your job, get promoted make money and eventually - decades of hard work later - you finally make it. But if Labour is in charge you get punished for your ambition - your income tax rate goes up, you get taxed for finally being able to afford a great house in a great place, etc. You've paid more than your fair share via income tax, national insurance, council tax, capital gains taxes and god knows what else, but it's not enough. Ed needs your money because there are people who have never given a damn about anything, never tried, never worked hard, never had ambition - and Ed needs to reward these people with money.
But immediately I see a practical problem. Already the issue in the Southeast is that foreign buyers buy property as an investment and a safe place to put their wealth. So when they have to pay £12000 a year, and their investment stops looking so good, what will they do? Will they pay the tax?
Of course not. They'll just sell their £2million London flat and buy multiple lower-valued London flats. So now the number of foreign-owned London properties which sit empty all year actually doubles or triples. And people hoping to buy a flat find that the low- or mid- range flats are soaring in value even more than before because every property baron is trading in his chips for smaller denominations. So that tiny slither of unlikely hope of buying a place in the Southeast gets even tinier.
Of course that's not all - every Labour initiative has numerous terrible effects.
A lot of people have their pension money tied up in property development companies and property itself without even knowing it. If your money is invested in a £2.5 million house in London - bad luck, because no one wants to buy a house that costs you thousands extra in tax each year, so its value will fall. If your money is tied up in a luxury property development company that builds high-value properties - bad luck again.
It won't have a significant effect on lower value homes.
None of the major parties have housing policies that will significantly help 'regular' people have a home...This policy is just a pitiful attempt to emphasize Labour's stance against the rich and realign themselves with the poor.
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The problem with Ed's mansion tax watch
- 06-10-2014 20:24
- 06-10-2014 20:41
The problem with the mansion tax is that it is a tax. That is all.