Whitby - Being Destroyed by 2nd Home Owners

To me fixing the wrongs of taxation through inheritance is not the way forward and something which is so intrinsically disliked it will never be implemented. Rather than taxing on inheritance, we should be fixing the tax system to create a fairer society before wealthy people can pass it on as inheritance. By that i mean progressive policy such as reducing VAT and taxing more on high incomes, shares, 2nd home ownership, it seems ridiculous someone on benefits has to pay the same vat on essentials like food, clothing etc. as someone on wealthy incomes. VAT is a really unfair scam to suit the rich. In terms of housing i would also raise stamp duty, particularly for second home owners.
 
Wales have increased council tax for second homes to a level where it exceeds the normal rate.

What used to amaze me was that second homes didn't pay the full council tax. Councils seem to have increased council tax in recent years on second homes. I think central governement may stopped councils charging the full rate. To me this was clearly wrong in the past.

Covenents could be placed on new properties to stop them been used as holiday homes/Air B n B and to stop existing first homes being converted. Build social housing that is rented out and more controlled in its use i.e you lose it if you sub rent/let.

I am not saying you can stop it but it can be made harder, at present there are none/few restrictions. We treat housing like baked beans - anyone can buy and sell who has the funds.
 
Nano said:
Why are you talking about the risks of someone else then? Why should you be able to receive a sum of money without contributing anything towards earning it?

You wouldn't question why you pay income tax when someone else took all the risks to set up a business would you? What's the difference?


If everyone was taxed properly then people in their 60s wouldn't need inheritances to survive. The Tories would never bring these policies in because it benefits the rich the most. You are upside down. Labour won't bring it in either because it would be a vote loser but only because people don't understand why inheritance tax done properly is better for them.

As I've already said anyway, if you want to help the next generation do it while you are alive instead of waiting until you are dead. A 60 year old would have benefited far more from having the cash in their 30s than they will in their 60s.
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why
Nano said:
Why are you talking about the risks of someone else then? Why should you be able to receive a sum of money without contributing anything towards earning it?

You wouldn't question why you pay income tax when someone else took all the risks to set up a business would you? What's the difference?


If everyone was taxed properly then people in their 60s wouldn't need inheritances to survive. The Tories would never bring these policies in because it benefits the rich the most. You are upside down. Labour won't bring it in either because it would be a vote loser but only because people don't understand why inheritance tax done properly is better for them.

As I've already said anyway, if you want to help the next generation do it while you are alive instead of waiting until you are dead. A 60 year old would have benefited far more from having the cash in their 30s than they will in their 60s.
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Why stop there?

Why don't we tax the money as it goes to a spouse of someone that died? And why have any thresholds at all if, as you say, it is unearned, why not just tax 80% of the full amount?

In fact let's just increase national insurance some more and whack income tax up while we are at it.

You're right, it would be a vote loser because it's a completely crap idea that almost everyone will disagree with.
 
Glover_elbow said:
To me fixing the wrongs of taxation through inheritance is not the way forward and something which is so intrinsically disliked it will never be implemented. Rather than taxing on inheritance, we should be fixing the tax system to create a fairer society before wealthy people can pass it on as inheritance. By that i mean progressive policy such as reducing VAT and taxing more on high incomes, shares, 2nd home ownership, it seems ridiculous someone on benefits has to pay the same vat on essentials like food, clothing etc. as someone on wealthy incomes. VAT is a really unfair scam to suit the rich. In terms of housing i would also raise stamp duty, particularly for second home owners.
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All of that is much more sensible and would be supported by many.
 
Glover - interesting post.

I will give you an example

Income for employment - £155k a year - current marginal tax rate is 47% - would you increase that to say 62% and get rid of inheritance tax?

Property is only really seriously taxed when it is sold as a second home. We don't have a wealth tax in this country except on death outside family trusts. Some properties are never sold. Income from shares is taxed the same as earned income tax, although capital gains is lower on shares and could be increased. Quite a few shares are held in tax avoidance wrappers/schemes like Isas, Trusts, Enterprise tax relief schemes and can avoid all taxes.

My feeling is weath inequality is rising faster than income inequality but I don't have the facts (property and share values including bit coin are rising faster than wages/salaries is my logic). Hence in a world where tax that can raised has a limit, wealth tax needs more addressing.

I have argued for closing/reducing the numerous tax avoidance schemes some of which even increased under Labour. This got to laughable proportions when Jimmy Carr thought it was legal to pay 1% tax on an income of over say £500k? a year.
 
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ThatFragranceGuy said:
why

Why stop there?

Why don't we tax the money as it goes to a spouse of someone that died? And why have any thresholds at all if, as you say, it is unearned, why not just tax 80% of the full amount?

In fact let's just increase national insurance some more and whack income tax up while we are at it.

You're right, it would be a vote loser because it's a completely crap idea that almost everyone will disagree with.
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Excellent question. I think @Redwurzel answers some of it because we are talking about wealth. We know that wealthy people have way more of a headstart than less wealthy. This is why there are regular calls for windfall wealth taxes.

I think it is easiest to understand if you look at the extremes. In this case 0% and 100% inheritance. Who benefits most from each option?

At 0%, the richer you are the more wealth can be passed on to give to your kids. The poor will never, ever be able to catch up. Social mobility is severely limited.

At 100%, that headstart disappears. People have to actually earn things instead of just being given them. The poorest aren't far behind the richest. Social mobility is vastly improved.

Imagine if instead of a billionaire giving all their money to 1 or 2 kids (via a Trust so no tax), every estate was left to the country as a whole and everyone got an equal share. Who would benefit the most? There is about £80bn worth of assets left behind each year, not including hidden assets in Trusts or offshore etc, so potentially far more. We could spend that much better by targeting it towards public services and the people that need it than we can keeping the rich rich.

Somewhere between 0% and 100% is obviously best and a progressive system would be better but even then there is an inherent unfairness that the people that inherit nothing will never be able to catch up. If you want to increase social mobility then higher taxes are the way to do it. For the people at the bottom they are already in a system with an effective rate of 100% and the people at the top are already in a system withe an effective rate of 0%.
 
It's creeping in in other villages and towns too.

Great Ayton has seen an influx of homes been bought up for holiday home use, wether that's private, air BnB etc.
 
Nano said:
Excellent question. I think @Redwurzel answers some of it because we are talking about wealth. We know that wealthy people have way more of a headstart than less wealthy. This is why there are regular calls for windfall wealth taxes.

I think it is easiest to understand if you look at the extremes. In this case 0% and 100% inheritance. Who benefits most from each option?

At 0%, the richer you are the more wealth can be passed on to give to your kids. The poor will never, ever be able to catch up. Social mobility is severely limited.

At 100%, that headstart disappears. People have to actually earn things instead of just being given them. The poorest aren't far behind the richest. Social mobility is vastly improved.

Imagine if instead of a billionaire giving all their money to 1 or 2 kids (via a Trust so no tax), every estate was left to the country as a whole and everyone got an equal share. Who would benefit the most? There is about £80bn worth of assets left behind each year, not including hidden assets in Trusts or offshore etc, so potentially far more. We could spend that much better by targeting it towards public services and the people that need it than we can keeping the rich rich.

Somewhere between 0% and 100% is obviously best and a progressive system would be better but even then there is an inherent unfairness that the people that inherit nothing will never be able to catch up. If you want to increase social mobility then higher taxes are the way to do it. For the people at the bottom they are already in a system with an effective rate of 100% and the people at the top are already in a system withe an effective rate of 0%.
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The idea of an inheritance tax is to stop wealth being kept in perpetuity in the top end of society. Not every home to be inherited will be in Whitby and not every 60 year old is financially secure and doesn't need the money, despite same as before's suggestion that people of that she need it the least. You said to help children when they are alive, and people already do that - however any amount above £3k a year is then also taxed, so it's difficult to do except over long periods of time, and who's to say you won't need that money? Just because you are of retirement age doesn't mean you don't have financial pressures or don't need/want money to spend, but nor does it mean that when your life comes to an end the government should just receive an extra 40% or whatever sum of it just because.

Taking massive chunks of tax of those standing to inherit what amounts to a 4 bed house in the suburbs in one of the poorest regions of the country does nothing to further that aim of keeping property available ans reducing perpetual wealth. That is why the amount of inheritance tax threshold is already set to a pretty fair level, and I can't see either of the main parties being stupid enough to try and bring in such a policy as it would be the end of the one that did it. If someone has 3 kids and hands down 350k, that's only 116k each. If they were 60, and life expectancy is 81, that is the princely sum of £5k a year uplift. Hence why, imo, it is correctly set at the current levels.

Hardly going to make them Jeff bezos.
 
Redwurzel said:
Wales have increased council tax for second homes to a level where it exceeds the normal rate.
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This is the answer. Ringfence the extra revenue towards genuine affordable housing or house share schemes where part ownership is possible.
If the second home increase is too high they'll sell up anyway freeing up the housing for locals and driving down prices with a saturation of the market in lower cost second homes.
It'll never ever happen on a meaningful scale of course while this lot are in power coz they just do not give one tiny fk for the less well off. And it's not a vote winner.
Reason number 317 to detest this disgusting government.
 
My family moved to Whitby when I was 14, at the age of 21 I decided there was no future for me there. I love the place and it will always be home but I made the right decision.
 
ThatFragranceGuy said:
The idea of an inheritance tax is to stop wealth being kept in perpetuity in the top end of society. Not every home to be inherited will be in Whitby and not every 60 year old is financially secure and doesn't need the money, despite same as before's suggestion that people of that she need it the least. You said to help children when they are alive, and people already do that - however any amount above £3k a year is then also taxed, so it's difficult to do except over long periods of time, and who's to say you won't need that money? Just because you are of retirement age doesn't mean you don't have financial pressures or don't need/want money to spend, but nor does it mean that when your life comes to an end the government should just receive an extra 40% or whatever sum of it just because.

Taking massive chunks of tax of those standing to inherit what amounts to a 4 bed house in the suburbs in one of the poorest regions of the country does nothing to further that aim of keeping property available ans reducing perpetual wealth. That is why the amount of inheritance tax threshold is already set to a pretty fair level, and I can't see either of the main parties being stupid enough to try and bring in such a policy as it would be the end of the one that did it. If someone has 3 kids and hands down 350k, that's only 116k each. If they were 60, and life expectancy is 81, that is the princely sum of £5k a year uplift. Hence why, imo, it is correctly set at the current levels.

Hardly going to make them Jeff bezos.
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I think inheritance tax is about right it's other taxes you pay while you're living I think are wrong. Really it's the property market which is screwed especially in southern regions where prices are ridiculous this has a dreadful knock-on effect. I would tackle wealth inequality 3 ways make taxation more progressive on income to move away from indirect stealth taxes over time. Secondly make it virtually impossible through taxation for people to make an income out of property letting and 2 home ownership. Finally I would push further into leveling up regional variations with insentives for companies to move away from the property hotspots like the south east.
 
£500k - my proposal covers a 4 bed in most areas of the country ,currently its £1m if all allowances are claimed which seems generous to me (nearly 4 times the average price of a property). A 20% tax on anything above £500k is not severe. If a poster on here left £1m of assets that would be 20% of £500k or £100k in inheritance tax paid once every generation.

Another option would be to have an annual wealth tax say at 1% so if you owned an average of £500k of assets that would be £5k a year over 20 years that would be £100k. It would be costly and difficult to administer. People would be hiding stuff all over the place.

If wealth is not taxed in some way there are going to major financial problems for Government and public services, there already is but its going to get much worse. One reason property is so popular is that its taxed very lightly in the UK - £2k to £2.5k Council tax a year on a £500k house is not much when the house is going up in value by say £40k a year (8%) and its paid at the same rate by renters, Stamp duty is only paid when someone buy a property, say once every 12 years and currently its only paid on sums above £500k for first time buyers. Areas like the North East are losing out because they don't get same level of benefit of low property taxes, but will suffer more badly when the Government has to make cuts backs like freezing welfare payments and people on incomes as low as £12,700 have to pay income tax and national insurance (below the official living wage). This has been happening since 2010.
 
ThatFragranceGuy said:
why

Why stop there?

Why don't we tax the money as it goes to a spouse of someone that died? And why have any thresholds at all if, as you say, it is unearned, why not just tax 80% of the full amount?

In fact let's just increase national insurance some more and whack income tax up while we are at it.

You're right, it would be a vote loser because it's a completely crap idea that almost everyone will disagree with.
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I agree with most of that. It's not right to pass in money based on inflation.
 
I live in a tiny village with a very limited housing stock. I was talking to an older resident today and he said that he’s putting his house on the market and that Strutt and Parker have a list of folk from London waiting to come to places like this. He’s bypassing local estate agents. His house will definitely be over 1.25 million, due to its size and the land it has with it. It’s really sad that the target audience are London folk rather the local community It will mean fewer and fewer locals will get the chance to live here.
 
My mate went to London 35 years ago, worked his gonads of 7 days a week 14 hours a day, he’s just moving back now, bought himself a nice house and plot of land just outside Guisborough 😏
 
When we moved to Norfolk with the Forces and had a house provided but looked to get on the property ladder. Found some decent houses but were told that of we could not prove we had lived in the area for the last 5 years you have no chance. But things change and money changes people more. That area is full of second homers to the point where the younger local generation workers have to move away due to costs. All well and good but places are ghost towns Mon-Fri and then the 4X4's pile in on a Friday evening.
 
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