A thinktank has proposed scrapping Stamp Duty on a main residence and replacing it with a tax on sellers based on the growth in their property price.
The report by the Social Market Foundation claims this would help pay for the costs of the coronavirus financial support and reduce the UK’s debt burden.
Report author Michael Johnson, a former banker and actuary, suggested the tax could be set at 10% of the increase in the value of the property since the last time it was sold and would replace Stamp Duty on purchases of a main residence, therefore removing the charge from buyers.
He suggested this property gains tax could raise £421bn over the next 25 years.
The new tax would fall largely on older people – who own most of Britain’s property – and those who inherit property and then sell it, the report said.
Johnson said: “The alternative is that the young will have to pay for a debt-laden future. They are already hugely disadvantaged, financially, relative to older generations. Asking them to bear the burden of this crisis in the decades ahead would be unfair and unreasonable.”
James Kirkup, director of the Social Market Foundation, added: “These reforms are bold, far-reaching and could be politically controversial.
“The older voters who own most British property are a powerful group.
“But the scale of the coronavirus crisis and the unprecedented outlook for the public finances mean that responsible politicians of all parties must be prepared to embrace new ideas and take bold action.
“Failure to act risks severe economic and social harm. A post-crisis era where the costs of the crisis fall more heavily on the young than the old could strain the social contract between the generations to breaking point.”
Comments (15)
Can you imagine if a business did this…
A cinema where you pay on the way in but then while your inside watching the film they decide that actually you dont have to pay to go in but you now have to pay to leave. I think that would be called a scam.
Roll-up Roll-up…..
Any Clowns with daft ideas on anything.
On a serious note – can we start with that other crisis …..Care Costs for the Elderly?
……..not forgetting Boris’s repaint of the UK Company jet at just shy of 1 Million? WTF? …….of course, he wants to tour the world Trump Style, begging for business partners ……after the Great British Brexit Gameshow begins in 2021.
2020 – Year of Covid
2021 – Year of Brexit
2022 – Year the World Ends
Put the “Think Tank” in a Tank and bury it DEEP!
The only way to make SDLT fair, workable and affordable is to put a blanket charge on every transaction – 0.5% to the seller, 0.5% for the buyer and apply it to everything.
A home should be viewed as a means to protect yourself and your loved ones from the elements by providing the most basic of needs -shelter.
The plebs have been told, and believed that ones worth is determined by the home they live in.
The system is broken and will be broken still further by future governments – via punitive Landlord taxes and COVID .
Multi generational living like Charlie Bucket and his family is not progress; but that is the way things have been heading.
The Cadbury family understood this over a century ago when nobody owned a home.
The under 35’s have an insatiable appetite for the finer things in life; the latest technology, cars on finance, holidays and regular nights out drinking expensive cocktails wearing designer brands where they moan to their friends that they can’t save up enough for a house deposit.
They want to buy Instagram ready properties where they can move straight in and continue living their best lives.
Perhaps they should instead be taught to lower their standards and put in some hard graft to create something that they can afford.
I fall into the under 35’s category and am about to buy my fifth house, with no help from the bank of mum and dad or a help to buy government grant.
It can be done.
Perhaps those who make up these stink tanks have been smoking the wacky baccy?
Did you read what that clown Johnson said.
Johnson said:
“The alternative is that the young will have to pay for a debt-laden future. They are already hugely disadvantaged, financially, relative to older generations. Asking them to bear the burden of this crisis in the decades ahead would be unfair and unreasonable.”
I fear it’s yourself on the old waccy baccy. Now roll yourself another fat one, pour a large Scotch and watch this unfold. The young are kicking back with their Gas masks and umberellas – they will have there say, nothing surer.
Quite right that they should. The old Baby Boomers have basically purloined the whole nation’s wealth. I wouldn’t mind if they had worked for it. But the massive wealth transfer that has happened from young workers to old rentiers has happened almost solely because of property price inflation. The Boomers didn’t ‘earn’ this wealth (unless you count opposing all residential development in their area as “work”). And it is wholly untaxed too. Anyway, the chickens are coming home now. Everyone except the guilded Boomers can see that it is isn’t fair, it isn’t right, and the young working people are finally starting to realise that it doesn’t have to be like this.
I have been trying to persuade my parents to downsize and invest their gain to top up their income. They wouldn’t move if this came in.
My friend is relocating for a job. He wouldn’t move if he had to pay CGT as he would have to spend less on his new home.
Neither the above would be good at raising money and the economy if they didn’t move.
My God, all those dreadful old people! And then those poor under 35’s – doesn’t bear thinking about. Sorry about that debt-laden future. There was another generation who fought 2 world wars, bled for their country and then got handed a debt-laden future for their trouble. Old people didn’t create Coronavirus, which on the face of it is a natural phenomenon. How does taking wealth away (early) from an older generation solve the problems of the young?
This is so poorly thought out. We should be trying to stimulate and incentivise sales by older people, not throttling them! There has already been a falling supply of properties for the last 10 years with a great deal of people staying in houses which are too big for them and 1000s of young families looking to move into these types of properties. This suggestion is most definitely not the answer.
You are correct that we need more ‘incentives’ to get people moving. The obvious solution is a proper Land Value Tax based on the current market value of the property. This should be introduced in line with lower SDLT. That will quickly smoke out all those old people clogging up the market in totally unsuitable properties, and create a more bouyant with which to absorb the supply.
Are think tanks paid to come up with ideas like this – apply capital gains on the uplift in value since it was purchased? Applied retrospectively? How to alienate every home owning voter in the country.
the thing about property and inheritance tax proposals is that anything proposed has eventually to go through the House of Lords.
What will affect the little people has to have vehicle so it doesn’t affect them or it will get blocked.
If a vehicle can be created to protect old money it’s there for the ordinary folk too.
They’re not bold, they’re a Baldrick cunning plan.