Would you support a BIG second home tax?

And a lot won't inherit anything.

 

Hang about, I thought you didn't watch movies?

 

No one thinks he shouldn’t be able to sell it.

But to flip your argument: why should he make a much bigger profit on a house ‘investment’ than any other market he could have invested in?

 

Read this whole thread expecting that surely someone would point out that there already is a tax on second homes.

In April 2016 the 3% SDLT surcharge on second homes was introduced making buy to let much less attractive than it was prior to 2016.

You might not think it’s high enough, but somewhat pertinent to the conversation?

 

You make more profit in property because there's more leverage involved. You can own the profits on a full asset whilst only paying 10% up front on a residential, or 25% up front on a subsequent property.

 

You didn't answer my question - instead you gave a distorted view of the market.

I'll try again as it's a very simple question - and I speak as a home owner approaching retirement (so I've benefitted well personally).
Why should an investment in property have a guaranteed return that massively beats any other legal investment portfolio?

 

Basic economics is that the (average) return made on an investment is correlated to the riskiness of that investment.

An investment in property does certainly not guarantee you a 5% return. Compared to some investments it is relatively risky, and the (average) return generated reflects that. Whilst the average return may be 5%, in some cases investors will lose money. That might be due to structural issues, legal problems, a housing market collapse etc.

About the only investment you’re guaranteed a return on is government bonds and the yields on those are so low (and in some cases negative) because of that.

If the return generated on an investment is not considered to represent the riskiness of that investment, the price of that asset will either increase or decrease until the average yield reflects the risk.

 

This

 

Buying a property isn't particularly risky, and you're mainly gambling with the bank's money.

 

Well it doesn't.

You'd expect your house to double in cost every 10 years. You'd expect that or similar with a stock portfolio. The SPX500 is up 20% in the last 6 months alone.

Returns are never guaranteed in either, but are likely.

 

Supertyke with a new bone.. does remind me of my pal Adam, whose family home went from 10k post war, to 2.5m, in 2 generations, 50 years. Inheritance tax made it impossible to keep.
Am I on the same subject. Hard to tell..
will go back to animal rights issues.

 

Did he still live in it?

 

Not over the last 20 years or so if you look at the FTSE 100 index

 

I can't tell whether you're trying to imply he was hard done by. I hope not.

 

Well that's pretty much not true, if property was growing along the same lines as other investments all your builder mates wouldn't have chosen it.

So if I've got this right - your original point is that simply 'some builders I know have invested in property for their retirement and it'd be unfair if they weren't allowed to make the obscene profit they expect'.

 

nonsense- My 5% return on a BTL property would be just the immediate income - it doesn't account for the 100% I'd also expect on selling it 10 years later.

Busts in housing markets are exaggerated to defend the ridiculous state of the market - any drop in prices is temporary, any 'investor' can ride them out, it's only homeowners who need a house to live in and suffer a change to their personal finances that suffer from house price reductions.

 

This was my class’ choice as an end of term reward.

 

Well thats debatable to be honest, I'm just countering the argument on here that people seem to think everyone who owns a 2nd property is absolutely loaded and raking money in hand over fist. When this isn't the case especially when many are just doing it for a pension as they are self employed.