The Daily Telegraph today launches a campaign calling on the Prime Minister and Chancellor to protect the savings of small investors and second home owners from the rise in capital-gains tax.
Please use the comments box below to add your support to our campaign, or tell us about how the rise affects you.
http://www.telegraph.co.uk/finance/personalfinance/capital-gains-tax/7773125/Capital-Gains-Tax-campaign.html
N.b. The text is referring to the comments box on the telegraph website.
Homes are flooding on to the property market and shares are being dumped by worried investors who hope to dodge the Government's controversial plans to hike Capital Gains Tax.
The country's biggest estate agency group, Countrywide, said the number of homes put up for sale in the past week was 34 per cent higher than the week before and 68 per cent higher than this time last year.
Investment experts believe plans to increase the tax on profits made on 'buy to let' properties and share portfolios are a key element of the great rush to sell.
Read more: http://www.dailymail.co.uk/news/article-1282360/The-growing-CGT-rebellion-Fear-tax-grab-sparks-mass-sale-homes-shares.html#ixzz0pLy1IhFb
I am in favor of Cameron imposing some kind of tax, say a Second home tax to increase tax revenues. I hope they do enough to make owning homes as an investment less popular. People should Invest in real businesses that add value to society, rather then buying up houses.
I've read there is about £3 trillion worth of unrealised gains from house price inflation. If the government can trigger some kind of catalyst to motivate people to sell up this should help bring in more taxes.
We are in this mess because of huge rises in house prices, it is about time houses deflate.
Cameron has hinted of higher interest rates are coming : http://www.telegraph.co.uk/finance/economics/7779794/David-Cameron-hints-at-interest-rate-rise-to-combat-worrying-inflation.html
I am in favor of Cameron imposing some kind of tax, say a Second home tax to increase tax revenues. I hope they do enough to make owning homes as an investment less popular. People should Invest in real businesses that add value to society, rather then buying up houses.
Blimey - I've had an "I agree with Nick" moment....... ;-)
I think there is far too much fuss by the Torygraph on the CGT point. After all, Thatcher's government once made a similar move when Lawson was Chancellor! And, since then, we've had the opportunity to shelter £7k or so pa for the last 15 years in ISAs....so anyone who is married could have squirrelled away over £200k outside the CGT net - so if they haven't done so (in shares) then they have only themselves to blame.
No - the people who are moaning the most are those who have been playing the CGT system to hoover up property. Perhaps the cleanest way of deal ing with this is to make ALL property investments (including one's PPR) subject to CGT? At least that way the flippers and other tax evaders will definitely be stopped in their tracks!
I don't think the government should make PPR's subject to CGT. But what they should do is make the rules more strict, it is ridiculous that people can flip their primary residence for a few weeks and then be exempt from tax.
How about they make someone stay for at least 1 or 2 years before they can call the flipped house as a primary residence for tax purposes?
This would then expose them to market fluctuations over the period of time as well as forcing them to adjust their own life. That could mean them having to move further away from work, moving their kids to different schools and in some cases forcing them to live in a property they were happy to rent away but never prepared to live in themselves!
I really hope the government taxes property gains, introduce a second home tax and not allow Investors to offset interest against tax. I think society would be better off if house prices were half their current prices, it really is pathetic when I come across an article about a top celebs rubbishing the stock market as a 'gamble' and they prefer property. Peter Andre, Dermot Murnahan and more recently Mark Ramprakash : http://www.telegraph.co.uk/finance/personalfinance/fameandfortune/7777579/Mark-Ramprakash-I-worry-about-life-after-cricket.html
We need to get out of the illusion that people can keep selling each other expensive houses to generate wealth!
A tax system should be eqitable. All parties doing similar transactions should suffer the same tax burden.
There is no justification for an asset owned by a business or one individual to be taxed at a different rate to an other individual.
The possibility (and we don't know yet) of capital gains of say 40% on a buy to let property, 25% on a similar property owned by a company (ie the Corporation Tax Rate, whatever that might be) and zero percent on a primary residence, is clearly nonsense.
There should be no moral component. It should not be within the remit of the tax system to tax one business activity at a higher rate than another. That takes us down the road to state corporism and central planning.
There is a case for taxing short-term capital gains at a higher rate than long-term gains to avoid converting income gains into capital gains but a taper system can handle that.
hugoc
A tax system should be eqitable. All parties doing similar transactions should suffer the same tax burden.
No, a tax system is there to adjust behaviours. Being fair doesn't come into it.
t really is pathetic when I come across an article about a top celebs rubbishing the stock market as a 'gamble' and they prefer property. Peter Andre, Dermot Murnahan and more recently Mark Ramprakash : http://www.telegraph.co.uk/finance/personalfinance/fameandfortune/7777579/Mark-Ramprakash-I-worry-about-life-after-cricket.html
We need to get out of the illusion that people can keep selling each other expensive houses to generate wealth!
Please stop! I don't want agreeing to become a habit! ;-)
I must say that one of the leading indicators that property taxation is in need of radical reform is indeed the fact that many many people (not just celebs etc) regard owning property as a way to make money...... and that in fact all this does is push more and more of the country's wealth towards assets which are utterly unproductive and it crowds out investment in enterprise.
This is fundamentally extremely unhealthy! And the tax system is a really important tool that should be used to change peoples' attitudes and behaviours in respect of property.
I've got nothing against property developers (buy a wreck, do it up, flog it for a profit etc) because they add value. And I've got nothing against buy to let investing per se, because they are supplying the demand for rental property....... but the present system simply isn't tight enough.
I suspect that the only way to address the issue is to:
a) tax every single property transaction under CGT (and then allow people to claim tax back in respect of their PPR up to a cap of, say, £50k).....then one has an unambiguous record of which property they are regarding as their PPR - and they cannot flip etc
b) report all mortgages outstanding to a central point AND tie up each and every mortgage with people's tax codes. I have no doubt that this would uncover quite substantial amounts of mortgage fraud, in which people have claimed that they are the owner-occupier of multiple properties (which they are in fact renting out). Any properties where the ownership goes unreported should be subject to penalous rates of local taxation (say 25% pa, until ownership is established) - and compulsory acquisition for zero consideration if the owner fails to identify themselves (or pay the local tax) within 4 years.
c) Raise the local taxation rates on property so that there is a real disincentive to hold multiple homes that are underused. Any home-owner could then get a rebate for any increase that applied to their PPR simply by presenting a tax certificate from HMRC verifying that the property in question was their PPR.....so the single home owner would be no worse off at all.
Obviously the above thoughts are top of the head and won't be watertight in practice - but the objective should be to squeeze out of the economy the ownership of multiple properties unless they have paid their full share of taxation. There would be nothing to stop people owning multiple properties - but the effective "free ride" perception of property as an "investment" must be brought to an end.
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