Loz Posted March 12, 2012 Share Posted March 12, 2012 I don't think they have gone into that much detail, but I have heard a 1% figure being bandied around. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-529955 Share on other sites More sharing options...
Senor Chevalier Posted March 12, 2012 Share Posted March 12, 2012 They could take it in deferred consideration or through a shared ownership arrangement to address the monetization issue, though it would be better to keep it simple and force a few sales. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530154 Share on other sites More sharing options...
Loz Posted March 12, 2012 Share Posted March 12, 2012 The problem with the Mansion tax is... how much - exactly - is a house worth? The council tax got around this by banding valuations, but if you are going to tax a percentage, then you have to know the exact value of the property on the day the tax is applied. And since the value of a house is 'what the next buyer will pay for it' this is pretty much impossible. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530171 Share on other sites More sharing options...
Marmora Man Posted March 12, 2012 Share Posted March 12, 2012 it would be better to keep it simple and force a few sales.So,Simply put, SC you want the State to forcibly dispose of an individual's private asset(s) in order to secure your ambition of "fairness". Seems to me to be a pretty unfair proposition. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530175 Share on other sites More sharing options...
Senor Chevalier Posted March 12, 2012 Share Posted March 12, 2012 Every year on Jan 31st the state forcibly takes a large chunk of my assets. Each year without fail. As a consequence my mortgage is much larger than it would be if they didn't. What's the difference?On the whole I think most people would find a way to pay the tax without being forced sellers. In a small minority of marginal cases the introduction of this tax may lead to a requirement to downsize. Yes, I think this would on the whole be tolerable. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530182 Share on other sites More sharing options...
Senor Chevalier Posted March 12, 2012 Share Posted March 12, 2012 Loz, I suggested self assesment for the house valuation problem a while back which as with all self assesment is open to abuse. To make the enforcement effective I sugested that people declare their house value each year and the state has a right to buy at a 20% premium to the declared rate.A few expropriations and people will get the message and start being honest. There could also be a scheme set up where risk averse people pay a small amount to get a government approved valuation. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530184 Share on other sites More sharing options...
Loz Posted March 13, 2012 Share Posted March 13, 2012 Senor Chevalier Wrote:-------------------------------------------------------> Every year on Jan 31st the state forcibly takes a large chunk of my assets. Each year without fail.> As a consequence my mortgage is much larger than it would be if they didn't. What's the difference?You are going to have to explain that. It that based on the value of your assets of is it based on your income for that year? > On the whole I think most people would find a way to pay the tax without being forced sellers. In a> small minority of marginal cases the introduction of this tax may lead to a requirement to downsize.> Yes, I think this would on the whole be tolerable.I suspect you would find it tolerable on the basis that it would not effect you in this way. So very tolerant of you. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530193 Share on other sites More sharing options...
Jenifire Posted March 13, 2012 Share Posted March 13, 2012 . Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530199 Share on other sites More sharing options...
Senor Chevalier Posted March 13, 2012 Share Posted March 13, 2012 OK Loz, let's deal with the personal stuff first. For sake of argument let's say the Mansion Tax kicks in at a level that is twice the value of your house. Let us also also suppose that this level is also higher than the value of my house (which it may or may not be). Now can we dispassionately discuss the principle?So why should A who has a house worth XXX the value of which may have come from a variety of sources, earnings, inheritance, capital gain, gift, lottery etc not be taxed. Meanwhile B earns XXX but because the value happened to be earned in the preceding year, a massive chunk goes to the taxman. Does there ever come a point where applying higher and higher tax to B without allocating any to A is unfair and one way of reducing the burden of tax on B would be to spread it partly to A. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530201 Share on other sites More sharing options...
Chippy Minton Posted March 13, 2012 Share Posted March 13, 2012 people declare their house value each year and the state has a right to buy at a 20% premium Am I understanding this correctly? Are you actually proposing the state would be able to compulsory purchase any property that was subject to the tax? Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530235 Share on other sites More sharing options...
Marmora Man Posted March 13, 2012 Share Posted March 13, 2012 SC - you miss a major point. The majority of non inherited assets are purchased from taxable income. To then tax a notional value of the asset to to make a double tax.For example - a top earner, liable to the 50% tax rate, buys a property for ?5m cash. He has earnt this money in the previous year - a conbination of salary & bonus. To have ?5m "cash in hand" he will have had to pay ?5m in income tax. You are proposing to then tax the ?5m asset at some figure (to be decided) every year thereafter - efectively increasing his tax to something in excess of 50% on the original ?10m. However, if he had spent the ?5m on a yacht, a damn great blingy diamond for his wife or mistress - no tax is incurred.It's a silly idea.A new Council Tax band could work - but that's a very different proposition to your wealth tax. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530240 Share on other sites More sharing options...
Loz Posted March 13, 2012 Share Posted March 13, 2012 Senor Chevalier Wrote:-------------------------------------------------------> So why should A who has a house worth XXX the value of which may have come from a variety of> sources, earnings, inheritance, capital gain, gift, lottery etc not be taxed. Meanwhile B earns> XXX but because the value happened to be earned in the preceding year, a massive chunk goes to the> taxman. Does there ever come a point where applying higher and higher tax to B without> allocating any to A is unfair and one way of reducing the burden of tax on B would be to spread> it partly to A.But only if A owns a house. If he rents, your cunning plan comes unstuck. And if B is very successful and owns a nice house in Chelsea, he get taxed twice.I'm all for a fairer taxation system, but this isn't it. This is just, 'you've got a nice house, give me some money' which just sounds like the politics of envy, rather than a well thought out addition to the taxation system. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530285 Share on other sites More sharing options...
Marmora Man Posted March 13, 2012 Share Posted March 13, 2012 So why should A who has a house worth XXX the value of which may have come from a variety of sources, earnings, inheritance, capital gain, gift, lottery etc not be taxed.Again your logic is fuzzy.Earnings: TaxedCapital Gains: TaxedGift: Unless minimal (I think the threshold is about ?7k for family - less for non family) taxedLottery: Untaxed - but its a 1 in 14 million chance of winning so very few in this bracket. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530288 Share on other sites More sharing options...
mikeb Posted March 13, 2012 Share Posted March 13, 2012 Capital gains on houses could be taxed on sale, like every other asset.If this sounds revolutionary then consider how until relatively recently you could deduct the interest on your mortgage against your income for tax purposes. It now sounds bizarre that housing should have been given such an explicit subsidy.I didn't buy a house to make money - in fact house price inflation impoverishes everyone except those who will never buy again or who are now looking to downsize. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530303 Share on other sites More sharing options...
Loz Posted March 13, 2012 Share Posted March 13, 2012 That's an entirely different debate, mikeb. I'd actually have more sympathy towards that as a) it taxed the asset capital gain, rather than the asset value and b) it is done at a point of liquidity. If it replaced Stamp Duty then that would be a good thing. It always struck me as strange that the purchaser paid tax, but the seller didn't.The other side would be that it may discourage mobility, but that would depend on the level of taxation. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530328 Share on other sites More sharing options...
mikeb Posted March 13, 2012 Share Posted March 13, 2012 It's not another debate to me - it's about whether the income was "earned" or "unearned". House price gains are the epitome of unearned and socially divisive income - transferring wealth from non-homeowners to homeowners (usually intergenerational as well). If the mansion tax isn't about this then it is just a tax on wealth (and an inefficient one at that). We may as well be discussing a tax on expensive artwork or sports cars. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530411 Share on other sites More sharing options...
Senor Chevalier Posted March 13, 2012 Share Posted March 13, 2012 Yeah I originally banged on about taxing wealth rather than houses and everyone said too hard. So now falling back to houses, people say unfair as could have spent on art or whatever. Counterarguments flit between points of principle and points of implementation which is all rather difficult, but I guess that's life and this is a forum not a taxation think tank...I agree with mikeb though it is the unearned bit that is the bit that is most objectionable (and also conveniently the bit that Marmora Man can't make an arguably irrelevant double taxation point about). I would imagine that if you look at the overwhelming majority of mansion owners there would be a significant unearned portion, but there may be other more scientific ways of dealing with this rather than the blunt instrument of a mansion tax. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530420 Share on other sites More sharing options...
mikeb Posted March 13, 2012 Share Posted March 13, 2012 The other angle to the mansion tax is to somehow address the presence of non-domiciled property owners who pay no inheritance tax, stamp duty or capital gains tax on their [2nd / 3rd / 4th ...] home due to it being held by an offshore SPV. Yes I know there are plenty of benefits to accommodating overseas entrepreneurs (spin-off services, direct and indirect employment). The same arguments apply to accommodating Colombian drug dealers or Russian mafia but I don't want them living in my street. Our existing tax system leads to large parts of the West End becoming ghettos for the overseas rich, the knock-on effects of which change the nature of the whole capital.Still not sure a mansion tax is the best way to address the unfairness in tax burden - better to the change non-dom and property SPV rules. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530490 Share on other sites More sharing options...
Senor Chevalier Posted March 13, 2012 Share Posted March 13, 2012 Christ surely they still pay stamp? Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530494 Share on other sites More sharing options...
mikeb Posted March 13, 2012 Share Posted March 13, 2012 No, there is no stamp duty on a purchase of a property SPV (OK, there is stamp duty reserve tax but at 0.5% not 5%). It doesn't make much sense for me and you to do this as we'd then have to pay CGT on the value of the property company, as it would not qualify for principal private residence relieft from CGT (I think). But if you're non-resident then you don't need to pay CGT on off-shore gains, so just put the SPV in Jersey and pay minimal rent (to a SPV you wholly own). Maybe there is lots of tax to pay in Russia or Saudia Arabia but let's not hold our breath ...I also have heard of some quite odd schemes involving Sharia financings which apparently are also exempt from stamp duty. I don't know how these work. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530496 Share on other sites More sharing options...
Senor Chevalier Posted March 13, 2012 Share Posted March 13, 2012 Wowzers must look into the whole non Dom thing Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530497 Share on other sites More sharing options...
Huguenot Posted March 14, 2012 Share Posted March 14, 2012 There seems to be some misunderstanding here based upon the idea that an increase in the value of a house puts money into people's pockets - it doesn't.If I buy a house today, and tomorrow somebody will pay more than I paid to own it, it also applies to the house I move into. I do not gain unless I downsize.If you try and tax a person for owning a house that goes up in value, there is no guarantee that they can pay the bill, after all they could only afford a cheaper property.You are simply saying 'someone else can pay more for your house so either give the government some money or the government is going to evict you'.It really is that simple. It's insane. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530628 Share on other sites More sharing options...
Marmora Man Posted March 14, 2012 Share Posted March 14, 2012 This thread all boils down to a desire to "tax the rich". Understandable envy but very poor economics. The top 1% of UK earners contribute close to 25% of all HMRC income tax take, the top 5% (roughly all those earning more than ?60,000 pa) contribute 40%. So the "rich" are already shouldering a fair share of the tax burden - perhaps even more than a fair share. Why pile more on them? What might they do - for those with patience to read it the Adam Smith Institute Paper might, perhaps, be enlightening. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530635 Share on other sites More sharing options...
Loz Posted March 14, 2012 Share Posted March 14, 2012 Actually, MM, the most recent figures show that:- the top 1% contribute 26.6% of the income tax take on a share of 12.4% of the total income.- the top 5% contribute 45.3 % of the income tax take on a share of 25.2% of the total income- the top 10% contribute 55.5% of the income tax take on a share of 34.8% of the total incomeIt always amuses me when people say (generally in the Guardian comments) that the 1% should be kicked out of the country. Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530670 Share on other sites More sharing options...
mikeb Posted March 14, 2012 Share Posted March 14, 2012 @H - eventually everyone has to downsize...the good news is that most of the house price gains will be needed to pay healthcare bills Link to comment https://www.eastdulwichforum.co.uk/topic/19258-mansion-tax-lib-dems-or-vince-cable-at-least/page/5/#findComment-530681 Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now