How would a property wealth tax impact your property?
Here at https://sellmyhousequicklyworthing.co.uk/ we thought Worthing property owners would be interested in finding out more about a proposed wealth tax.
A former banker has commissioned a new Social Market Foundation report based on the fiscal position of the UK (https://www.smf.co.uk/publications/).
UK’s financial position
The UK’s budget deficit is now likely to be over £350bn which is 18% of GDP.
As a result net debt is likely to exceed £2 trn. This is even before the unfunded liabilities of pensions and other costs which add more than £6trn. This leaves the existence of a problem as undeniable.
Such a scale of debt means that there is pressure for much more action than can be resolved by small changes to tax rates.
The proposal to put the UK on a more sustainable budgetary position is that targeting household wealth is the only realistic way to help solve this crisis.
Such household wealth, which covers pensions, homes, financial wealth and physical assets, amounts to over £14.5trn. Of this £5trn. is in home equity which is more often in the older population (those over 50 having >75% of total housing wealth).
A proposal is that there should be a 10% tax on capital gains on a persons property when the house is sold or transferred. The suggestion is that the treasury could received £400bn. over the next 25 years through this scheme.
This is just one idea currently being proposed to help solve the financial hole left in the wake of COVID-19.
The question we at sellmyhousequicklyworthing are trying to answer for homeowners is how best to be positioned for these regulatory and tax changes. It is hard to know for certain given that, even if accepted, the timing and details would need to be thought through. It may for instance be the case that the tax is only applied after a certain threshold of gains or wealth has been acquired meaning that only those considered “rich” would be affected.