@dfk41
I’ve seen similar. A previous neighbour of mine, guy in his 30s, basically got given enough to buy a £350k house which he subsequently let out, the income from which funded constant backpacking and he didn’t really have to work.
Whilst there were times I envied his position, I don’t think knowing it was all handed to me would sit well with me compared to knowing I’d worked hard for what I have. There’s a huge sense of pride achieving financial milestones that you’ve reached through work that isn’t the same with handouts.
This will be unpopular but the one thing that isn’t taxed, and is making people wealthy surely more than many other means is profits on the sale of a main residence.
I have absolutely no disdain for any wealth generated from hard work, I also don’t really think inheritance that’s a product of hard work should be taxed (a second time). But people are making 6-figures p/a tax free from sitting in a house. No other short-med term asset gains even close in comparison are untaxed.
A friend of mine bought a maisonette in East London in 2012 for about £400k. Sold in 2021 for £1.2 million. That’s £800,000 tax free for effectively just living in a house. She could stick that in the S&P500 and never have to work again. My in-laws neighbors made £100k in a year on a house they bought in a popular place and sold a year later. Also untaxed.
Again, unpopular opinion and obviously most homeowners would likely reject such a proposal but I think there could be benefits to CGT on main residences. Perhaps above a certain threshold, and on a sliding scale based on time spent living somewhere so the longer you’ve lived somewhere the less you’re taxed since prices inevitably rise over time to some degree.
We’re constantly told houses should be a home, not an investment, yet homes have typically been the best investment you can make in the last 10 years by an enormous margin.