Clegg: Hit the rich with a new tax on big homes (UK)

[Newsjock]

Source: The Independent

Nick Clegg is turning his fire on the super-rich, revealing proposals to hit owners of million-pound houses in the pocket under Liberal Democrat plans to overhaul the tax system.

... Under the scheme, to be detailed at the Lib Dem conference in Bourne-mouth today, £17.1bn a year would be raised by cutting reliefs that benefit the best-off. The cash would be used to raise the basic starting-point for income tax to earnings of £10,000 a year, removing four million workers from tax altogether.

The plans will be unveiled by Vince Cable, the Treasury spokesman. The boldest element is an annual levy of .5 per cent on a property's value above a threshold of £1m. This would mean additional tax of £2,500 a year on a home valued at £1.5m, or £15,000 a year on a house worth £4m.

"That is not a big sacrifice," said Mr Clegg. "It is a perfectly reasonable thing to ask of people who have got properties of that value, and it's completely in line with how pretty well every tax system in the world works." It was only just, he added, to require the people who had benefited most from the "rollercoaster of housing prices" to contribute a small fraction of the profits they had made.

Read more: http://www.independent.co.uk/news/uk/politics/clegg-hit-the-rich-with-a-new-tax-on-big-homes-1790711.html

[katkat]

1. Excuse me

Excuse me, I'm a retired person and I live in a modest middle class house on land that has been in my family for 100 years. A few years ago, rich people started moving into my neighborhood, ripping down the old houses and building McMansions. Now the land is worth a lot and the property taxes have already forced some people of modest incomes to sell their homes, often owned for generations by the same family, and move away.

Strangely, I cannot eat the land, nor can I carve off pieces of it to pay my taxes with. When my mother passed away in 2000, her property taxes on this house were $1700 annually. Now mine on the same house are $14,000.

So if anyone thinks adding to property taxes, which is what this stupid idea basically is, is equitable, send them over to have a chat with me. Note that that idiot thinks everyone who owns such a home is a speculator, since he assumes they have made profits.

This is the sort of crap that led to Prop. 13 in California.

[Newsjock]

2. Is your house worth more than $1.63 million?

If not, then no worries. No extra tax.

[katkat]

3. today, tomorrow

Today $1.63 million, tomorrow what? It's the idea that's stupid, the assumption that property values, over which long time homeowners have zero control, can result in people losing their homes.

[muriel_volestrangler]

12. The highest council tax in Britain is in Sedgefield

where band D is £1,613. The highest band, H, pays twice the band D rate, so the highest council tax currently in the UK is £3,226, or about $5,235. Currently a house, no matter how many millions it is worth, cannot be charged more than the Band H value.

So, under this new scheme, a property would have to pay $8,765 (£5,400) more than now, and so be worth at least £2 million ($3.37 million), to have to pay the amount you already do.

Before the Tories introduced the poll tax, and then the council tax, there was no limit on what could be charged for council rates, which were based on the rentable value of a property. So this is really going back to something close to the system Britain had for a long time before Thatcher.

[pnwmom]

4. Many cities have limits on property taxes for the elderly. That would solve

the problem you're talking about.

[harmonicon]

6. I'm guessing that you don't know much about UK living situations

It's not like in the US - at all.

Also, if your property is worth a lot, maybe you could have it rezoned and in fact split it up to live off of, but I'm guessing that you don't want to do that. What do you want? Sometimes things go up in value, and I don't see why it shouldn't be taxed at that value. Presumably the land has stayed in your family because you've felt that it was valuable, and not because you thought it was complete crap.

[mainer]

11. So people who own property should just sell to survive?

And if taxes go sky high, who are they going to sell these homes to? No one will want them. In the meantime, you're stuck with enormous taxes, with a house you can't sell, and you're slowly going bankrupt on a retiree's income?

[harmonicon]

14. not necessarily

but if you've inherited something, I don't think you should be taxed on it based on what the value once was, but on what the value is now. There is a lot of hand-ringing going on now about property values going down since people have bought there homes, and in this case, someone is complaining about property value going up - you can't have it both ways.

In any case, in the UK, a one million pound house (close to two million dollars), is the kind of place that only a rich person will live in. Zoning laws are incredibly restrictive, so it's not very often at all that one could own land and then be taxed on it as if new homes could be built there. This whole argument got started by trying to compare apples to oranges.

[LiberalFighter]

8. If you live there and I can't tell based on your profile...

you need to contact your politician and let them know that if the tax is imposed that it should not be based on the so called value of the land.

AND you need to petition them to change the way land is appraised. Those that move in and build those stupid McMansions should have their property appraised at a higher rate. But those that have been living there for many years or even recent that have housing that was consistent to the time before the McMansions should have their property appraised based on the prior basis.

[diane in sf]

5. Unfortunately here a $1m house might be a two bedroom, one bath. You would have to go

after $3m and above to tax the truly rich.

[Rosa Luxemburg]

7. didn't they used to have window tax in England once?

http://www.longparish.org.uk/history/windowtax.htm

if you have 50 windows the tax might be a lot more! What about doors?

[and-justice-for-all]

9. I am all for a energy tax based on the size of ones home...

and this should also include department stores, malls and the like.

[mainer]

10. your home doesn't generate income. You can't pay taxes with bricks.

People can't suck money out of their houses, no matter how big the houses are. It's income that needs to be taxed.

[RUMMYisFROSTED]

13. RiF: Soak 'em!