All good Tories should support a mansion tax

[Cyclone]

i did put in a bit about encouraging smaller businesses with tax incentives but deleted it as it was a distraction from the main point about an influential conservative proposing a mansion tax

 

i appreciate the point about your dad's property circumstances and i'm sure lots of others fall in the same boat - obviously it depends on the level of tax applied and the value at which it starts, but it could, in such cases, for example, be deferred until the property is sold

 

the properties wouldn't necessarily need to be re-valued every year

 

the difference with the poll tax is that it only applies to higher value properties and, if deferred until the property is sold, isn't payable out of income

 

the link you attached appears to be from 2009, although i suspect the proportions haven't changed an awful lot, but the point i was making referred to a tax on property, not income

 

i agree there should be more incentives to generate wealth - especially at the lower end - which is what the article said, but the more i think about it, the more i am leaning towards it, although i do accept it isn't a panacea, it may only raise relatively small amounts, and it will need some safeguards for people like your dad

 

We already have a tax on property (purchases), stamp duty.

It's already progressive.

 

Taxing assets does raise the danger that the tax can't actually be paid out of income, and deferring the tax until the asset is sold might result in rather odd results, such as the entire estate of someone with a valuable house being owed to the government as back tax since they were unable to afford the tax out of income whilst retired in their house which they'd paid for out of taxed earnings and paid stamp duty on when purchasing.

[Hillpig]

wrong thread mate try to post in the one relevant to the discussion

 

The premise of the title of the thread is wrong. "All good Tories should support a mansion tax."

 

There is no such tax. I merely point this out and my comment is highly relevant to the discussion.

[frank ryan]

The premise of the title of the thread is wrong. "All good Tories should support a mansion tax."

 

There is no such tax. I merely point this out and my comment is highly relevant to the discussion.

 

the thread is about a PROPOSED mansion tax - keep up love

[Manlinose]

We already have a tax on property (purchases), stamp duty.

It's already progressive.

 

Taxing assets does raise the danger that the tax can't actually be paid out of income, and deferring the tax until the asset is sold might result in rather odd results, such as the entire estate of someone with a valuable house being owed to the government as back tax since they were unable to afford the tax out of income whilst retired in their house which they'd paid for out of taxed earnings and paid stamp duty on when purchasing.

 

but the problem with stamp duty, as i see it, is two fold - firstly it is only paid once by the purchaser, not annually, and, at the level of values being considered for the mansion tax, is a huge amount

 

as i understand it, the libdem proposed policy was for a 1% tax on the value of all properties over £2.0m - so a £3.0m property would have an annual tax of £10,000

 

stamp duty is 7% for any property over £2.0m and 15% if bought by overseas companies etc

 

so a £3.0m property would cost the purchaser at least £210,000 in stamp duty if my maths is correct

 

your second point is one i've always had an issue with - the home owner paid for the purchase price of the property out of taxed earnings, not the current value. if they sell it for double what they paid for it, they have no tax to pay on the unearned profit

 

and, although you'd have to go a long way before an annual £10,000 charge would wipe out any equity in most £3.0m properties, i'm not sure, in itself, it is a significant enough issue - it may well happen occasionally, but if it does, it does - it's the same question, why should that preclude them paying any tax that is due and payable

 

many people have to sell their houses to pay liabilities - largely to hmrc - why should mansion tax payers be any different

[Hillpig]

My apologies I was indeed on the wrong thread.

[Cyclone]

but the problem with stamp duty, as i see it, is two fold - firstly it is only paid once by the purchaser, not annually, and, at the level of values being considered for the mansion tax, is a huge amount

Being paid once is a good thing, that's how spent income should be taxed.

To keep taxing it every year is perverse.

 

as i understand it, the libdem proposed policy was for a 1% tax on the value of all properties over £2.0m - so a £3.0m property would have an annual tax of £10,000

Perverse. To tax wealth is fundamentally wrong. To tax income is much less corrosive.

 

stamp duty is 7% for any property over £2.0m and 15% if bought by overseas companies etc

 

so a £3.0m property would cost the purchaser at least £210,000 in stamp duty if my maths is correct

The equivalent of quite a few years of the 10k tax (21 in fact), but not ultimately ruinous, because if it's too much they'll simply buy a cheaper house. They will never find themselves lacking the income to pay a wealth tax.

 

your second point is one i've always had an issue with - the home owner paid for the purchase price of the property out of taxed earnings, not the current value. if they sell it for double what they paid for it, they have no tax to pay on the unearned profit

True, but given that all houses have appreciated they can only realise that 'profit' if they downsize. I suppose there might be an argument to tax any 'profit' that is not spent on another house as capital gains (which is what would happen if it were not a primary residence).

 

and, although you'd have to go a long way before an annual £10,000 charge would wipe out any equity in most £3.0m properties, i'm not sure, in itself, it is a significant enough issue - it may well happen occasionally, but if it does, it does - it's the same question, why should that preclude them paying any tax that is due and payable

The fact that it could happen should make it clear that the tax is a very very bad idea.

 

many people have to sell their houses to pay liabilities - largely to hmrc - why should mansion tax payers be any different

When the liability is generated simply from owning an asset over a certain value it results in wealth corrosion and a perverse situation of the person being punished by the state for owning an asset paid for out of taxed income and being unable to pay the window tax levied on it.

[SevenRivers]

What qualifies as a mansion? A small flat in parts of London would be worth more than a massive house in the North. Why not just increase Council Tax on the highest band properties, is it because central government won't get their hands on that cash?

 

---------- Post added 20-02-2013 at 22:47 ----------

 

Nice of Clegg to be targeting the elderly who have worked all their lives, paid into the system and done well for themselves to own a nice property.

 

http://www.telegraph.co.uk/news/politics/9883344/Nick-Clegg-Elderly-should-sell-homes-or-pay-mansion-tax.html

[truman]

your second point is one i've always had an issue with - the home owner paid for the purchase price of the property out of taxed earnings, not the current value. if they sell it for double what they paid for it, they have no tax to pay on the unearned profit

 

 

If you want to tax people on the profit made when selling a house should they also get a tax rebate if they make a loss on the property?

[Manlinose]

Being paid once is a good thing, that's how spent income should be taxed.

To keep taxing it every year is perverse.

Perverse. To tax wealth is fundamentally wrong. To tax income is much less corrosive.

The equivalent of quite a few years of the 10k tax (21 in fact), but not ultimately ruinous, because if it's too much they'll simply buy a cheaper house. They will never find themselves lacking the income to pay a wealth tax.

True, but given that all houses have appreciated they can only realise that 'profit' if they downsize. I suppose there might be an argument to tax any 'profit' that is not spent on another house as capital gains (which is what would happen if it were not a primary residence).

The fact that it could happen should make it clear that the tax is a very very bad idea.

When the liability is generated simply from owning an asset over a certain value it results in wealth corrosion and a perverse situation of the person being punished by the state for owning an asset paid for out of taxed income and being unable to pay the window tax levied on it.

 

some valid points there - there are a number of taxes levied which are only levied if you own or buy something - car tax, insurance premium tax, all sorts of so called stealth taxes - but i do agree with the basic point that the better way to levy tax is on income - any tax regime has to be balanced and fair - and, to my mind, progressive - food for thought in that post!

 

---------- Post added 21-02-2013 at 10:41 ----------

 

If you want to tax people on the profit made when selling a house should they also get a tax rebate if they make a loss on the property?

 

i could be wrong, as it is a long time since i did tax law, and i wasn't especially good at it when i did, and there have been umpteen budgets which will have changed things backwards and forwards since then, but is it still the case that certain losses can only be offset against profits in the same category of income - i.e a capital loss can only be offset against a capital gain?

 

i wouldn't have a problem with a loss on a house sale being off-settable against profits on house sales in the same tax year, but i'm not sure they should be able to set it off against, for example, income tax

[Blondie73]

I support the proposed mansion tax,since they are going after the disabled with the bedroom tax!!! Petition attached to this article to.

 

http://www.mirror.co.uk/news/uk-news/bedroom-tax-420000-disabled-people-1721706#.USYCy1NQRtc.twitter