Robert D;311335 wrote:My home is my tax haven is the old saying. It's free from IHT and CGT but is that right or fair? No, it isn't.. It's overdue for reform but it's also a political nettle and I cannot see any government willing to grab it.
You do realise that actual home ownership adds a fair chunk to the exchequer ?
Stamp duty, VAT, Income tax, Corporation tax from conveyancing, Capital gains tax, Income tax, VAT, Corporation tax etc from maintenance etc.
The alternative is for the state to provide all housing and charge rent. However I am pretty sure that when the exchequer raises the rent or other taxes associated with housing on a blanket coverage basis, we will soon have the same people who thought that same terms for everyone in order to make it fairer will be jumping up and down saying it is unfair.
IMO - focusing on the lowest hanging fruit, ie houses is not going to solve a lot. It needs to move further up the chain, ie land and land ownership. After all that is where the whole push towards taxation was introduced into the UK from India - In India prior to the EIC, though the land was technically owned by the kings, people who toiled it had the right to live and earn a means of stay from it and a small amount dependent on the output achieved after self sufficiency had to be paid to the king. This could be a share of crop/produce etc. In other words the land belonged to the people and it worked for centuries
However after the EIC went in, they made it that, regardless of output everyone had to pay a certain amount of tax/levy and this increased exponentially and at record pace. This also had to be paid in monetary terms as well as a proportion of crop (with rules on who could grow what - i.e regulations).
If the person or family could not pay the taxes/levy the land was transferred to someone else who could pay a larger monetary amount. This brought in large volumes of income to the EIC and its shareholders. At the same time it legitimised corruption in that wealthy. HM officials included and natives alike could become massive landowners, who later became the Zamindars and exploited the less wealthy further. It also brought about regulation and bureaucracy which could further be exploited with fines.
When this gig was yielding significant levels of income for the then EIC and later HM government (though the the treasure actually received very little as the officials has used it to buy land and influence in the UK and move into influential positions and power here in the UK) the officials brought this practice into the UK. However whereas in India everyone was technically a landowner, the same was not the case in the UK.
Here landowners were few but yielded a lot of power. So they decided to adopt the same technique but assigned the basis to something which everyone had, could have or needed to have "income". Thus Pitt the younger (whose family having made their fortune in India and then using it to navigate the political and social spheres including buying rotten boroughs, entering politics and eventually achieving the highest seat of Prime minster of the UK) introduced income tax into the UK in 1799.
Though guised as a temporary measure it never went away. Instead what it did was, ironically, keep the focus away from Land and the Land owning wealthy (the very measure it and the likes of Pitt the elder and similar ilk had used to loot the poor in India) in the UK.
Have you ever wondered why much of the land in the UK despite the sophisticated systems and measures is not actually registered in the central systems. Again this goes back to the old times where, in order to evade the risk of losing their land by means of paying extortionate levies taxes, native Indians began to slowly not declare change of ownership, especially where family members passed away (there was not IHT). Similarly in the UK the wealthy seeing this and learning from it, do not register their lands, instead they chose to deal with ownership within themselves and the various instruments which serves them better.
In fact I know of 4 families in my town where home ownership has passed down three generation but the main houses are not in the central land registry. There is no desire to get it in either, instead the families have amongst them sorted out the estates in a amicable manner amongst them. There are two other estates that are wrapped around trusts and the multiple properties and various parcels of land within the trust do not get to feature in the land registry either.
Nevertheless by focusing on Land ownership rather than houses, especially where developers buy it, then hold on to it, creating pent up demand, by controlling supply, in turn raising prices for both property and the land, may lead to both more houses and more home ownership.
So whilst IHT capture as small proportion of people, land tax would IMO raise a lot more and soon see a shift in attitudes.