Independent readers are divided over proposals being considered by Chancellor Rachel Reeves for a new tax on homes worth more than £500,000, with many questioning whether the threshold would unfairly affect ordinary homeowners rather than the truly wealthy.
Several argued that in high-priced areas, £500,000 is not a marker of wealth, with smaller homes often costing more than that.
“In London and parts of the South East, owning a £500k home… does not make you rich,” noted one reader, while others suggested a higher threshold or regional variations to avoid penalising middle-class families.
Some readers welcomed the idea of targeting unearned property wealth, arguing that decades of house price rises have created inequalities that younger generations cannot overcome.
“Taxing property, targeting unearned income, is what the government needs to do,” one wrote.
Others warned the tax could have unintended consequences, including discouraging downsizing, reducing housing market mobility, and forcing homeowners to raise asking prices to offset the levy.
There were also concerns that pensioners or couples on modest incomes could be hit unfairly.
Across the board, readers emphasised the need for a fair approach that distinguishes genuine wealth from ordinary homeowners.
Here’s what you had to say:
Regional house price disparities
I have recently moved from Berkshire to Yorkshire. The semi-detached house I've bought was £200,000 in Yorkshire, but the equivalent and possibly terraced house in Berkshire would have been £500,000. So this tax would certainly be a detriment to workers in the South East. The salary weighting is far from compensating for the house price difference.
Over a £1,000,000 might be a more appropriate national figure, but possibly there would need to be some regional differences. This could also be reflected in IHT rates for inherited property.
The problem that really needs to be addressed is ensuring that richer people actually pay tax on all their income and/or property, and that they are not able to legally "evade" tax using loopholes.
DavidWR
Do you think a £500k property tax is fair? Join the conversation in the comments.
Property wealth tax concerns
A tax on the unearned wealth of property due to the housing market of the last 40 years is a sensible tax. However, £500,000 is too low. It will bring many people who are just making ends meet into paying a tax they can't afford. In many parts of the country, especially the South East, £500k will barely get you a two-bed terrace house.
If a couple has scrimped and saved to buy one in the last few years and can just afford the mortgage, they may end up being stuck in a property they can't afford to sell. That will impact both job mobility and the housing market.
Maybe raise it to £750k to ensure it's only the genuinely wealthy that pay it.
Tabbers
Redistribution of unearned property wealth
A lot of people are missing the point… too much of the nation's wealth has been tied up in property, with huge increases in prices over the last 20–30 years, all to be passed on to siblings. Younger generations without rich parents don't stand a chance.
The government has no choice but to try and extract this unearned income and attempt to redistribute it to give other people a future. Taxing property, targeting unearned income, is what the government needs to do (and ignore the naysayers).
ChrisMatthews
Regional variation needed
£500K is far too low… no way is this a wealth tax, more just about managing tax. The average cost of a home around here is about £450K, and that is a two-bed terrace. Surely the price should not be a blanket one but reflect different areas?
mindful
Impact on downsizing
All that is going to do is make it far more likely that people in larger houses won't downsize, leading to increases in the value of those houses as the market dries up. The cost of moving house is already stopping many pensioners from downsizing. The level should be far higher or adjusted for regional differences at the very least.
KrakenUK
Inefficient housing stock
In the south of England, developers only want to build large homes as that’s where they can make the most profit. They justify the need for large homes by stating there is a terrible shortfall. In reality, there are millions of large homes in the UK with single elderly people rattling about in them, when a smaller, more efficient, quality home would make far more sense. Older people balk at the thought of selling up and paying loads in Stamp Duty for their new home. A new ‘selling’ tax will just cement this inglorious cycle.
Hardly Surprised
Council tax outdated
This Council Tax was a last-minute replacement for the Poll Tax. It has become as unpopular because it is based on property prices nearly 35 years ago. Things have moved on since then, and so should this tax system.
jadfg
Illusion of wealth through property
The illusion that you create wealth while sitting on your backside checking Zoopla to see how much your house has gone up has to be broken. Work creates wealth. Property prices just redistribute it unfairly. The worst result of house price booms is the emergence of millions of little property empires of buy-to-let investors who retire at 45 and contribute nothing thereafter. Ironically, they end up renting to each other's kids, but their imagination doesn’t stretch that far.
Carolan
Middle-class southern households
Labour seem determined to lose all support everywhere. In London and parts of the South East, owning a £500k home, which is often smaller than a £300k home up north, does not make you rich.
This is partially about trying to win over people who call middle-class southerners “the London elite”. Has Starmer not realised that no amount of red meat can satisfy the rabid? They just grow bigger and stronger on it. Starmer and co are reluctant to penalise the super-rich who can get rich after their term in office or use their media clout to hound them out.
BrotherChe
Economic warning
More adjusting of the net curtains while the house crumbles…
Prof Richard Wolff and Analyst Sean Foo on China dumping increasingly worthless US bonds, but after Japan and China, the UK, the third largest holder of worthless bonds, is buying more – collapse is on the horizon, especially as Trump blunders with little understanding of the impact:
Meanwhile, here in the UK, our chancellor is buying US Treasury Bonds like there’s no tomorrow! At the same time, we are told we are so skint we’ll have to cut back on help for the disabled. This will wreck our economy – all to try and crawl to Trump, who hates them!
Dolphins
Impact on pensioners
A property tax doesn't take account of residents' incomes. Four wage-earners in a £499k property would not pay, but a couple of pensioners in a £501k property would have to starve – and freeze – to death.
Lucy Lastic
Property as investment
People look to accumulate profit in house ownership to compensate for low wages. If their gaff is going up by 5 per cent year on year, they're quids in and can retire in style.
Lots of people own houses as a business – what percentage of homeowners actually live in that home? Stop anyone owning more than one house, especially foreign buyers. We are rife with investors dispossessing us here.
covergo
Some of the comments have been edited for this article for brevity and clarity.
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