Another day and yet another rumour emerges of an egregious attack on the wealth of Middle England by this tax-grabbing Government. It’s enough to reduce grown men and women, the prudent and thrifty to tears.
Having just informed us that a more pernicious inheritance tax regime is heading our way, Labour has now indicated that it is looking to impose a new property tax regime on middle-class homeowners.
It seems that nothing in our financial armoury – our home, pension and savings – is sacred in the eyes of Labour. It’s all there to be grabbed or taxed to the hilt.
Although details of the proposed tax are rather sketchy – and Treasury officials are currently remaining schtum – the fact that the story broke in the Labour-supporting Guardian newspaper suggests that this new tax regime has legs. No smoke without fire.
The tax, it seems, could apply to those selling homes worth more than £500,000 – and replace the current stamp duty tax which is levied on buyers. Another option is an annual levy on the value of a property – a wealth tax whichever way you look at it.
At what rate the tax would be applied is anyone’s guess but it would surely be set at such a level that it raised more than the Treasury currently receives in stamp duty (£11.6billion in the last financial year).
After all, this is a tax overhaul driven essentially by Labour’s desperate need to generate more revenue for the Treasury’s coffers, much diminished by the Chancellor’s bloated spending and costly U-turns on winter fuel payment and much-needed welfare reform.
It’s scary – bloody scary. Make no mistake about it, what is unfolding before our very eyes is class warfare on steroids. A spiteful assault on millions of people who through a mix of thrift, sacrifice and damned hard work have built their own financial fortress, only for the Big Bad Wolf that is Labour to come along and attempt to blow it down. While the current stamp duty tax regime is far from perfect, a replacement property tax – whichever form it takes – would bring with it a shedful of issues.
Rachel Reeves is looking to impose a new property tax regime on middle-class homeowners
For example, if it took the form of a seller’s tax, it would surely clog up the housing market even more than it is now. I imagine that many elderly homeowners sitting in sizeable £500,000-plus properties would opt to stay put rather than sell up, pay the tax and downsize.
But if it was an annual tax, it could blow a hole in your household budget.
Alongside the replacement for stamp duty, Labour is also rumoured to be looking at abolishing council tax and introducing a ‘local’ property tax which owners, not residents, would pay. This would be based on the value of the home.
Good luck there, Rachel Reeves, given that a similar idea (the poll tax) introduced some 35 years ago by a Conservative government led by Margaret Thatcher went down like a lead balloon – and was swiftly abandoned.
Of course, there is a strong case for reform of property taxes in this country. But my suspicion is that Rachel From Accounts will use reform as cover to squeeze the middle classes until the pips squeak.
As far as she is concerned our homes, pensions and savings are hers to tap for extra tax. Frightening.
Beware of the Big Bad She-Wolf.
