As summer holidays come to an end, households will now be shifting their focus towards the upcoming Autumn budget.
Why is this Autumn different? Let’s have a quick recap of what’s been happening in the UK:
Since Labour entered government, there has been a strong focus on reducing government debt, currently around £2.9 trillion (96% of the UK GDP) – levels not seen since the 1960s. The two obvious factors that have fuelled this are the 2008 Financial Crisis and the 2019 Covid pandemic.
The government have been trying to find ways to get the debt down to sustainable levels. The unpopular national insurance hike for businesses has exacerbated the already tight job market, with many firms holding out from hiring.
Adjustments to income brackets were in the talks but quickly disappeared once the public caught the whiff. So, what other ways does the government have?
Property Taxes on the Wealthy
Property taxes. Over the past weeks, Chancellor Rachael Reeves has considered taxing wealthy mansions by hiking the capital gains made from the sale of the property. This means profits will be taxed more. Why could this spell trouble for you?
Already, property prices are unaffordable for many families, but the drop in buyers’ sentiment, with the average price falling by 0.1% between July and August from £272,664 to £271,079, tells us two things:
- Buyers are waiting for the Autumn budget
- Sellers could be lowering prices to reduce tax liabilities.
It could work out for cheaper prices for homes, but will this really be the case? Hardly, since demand for houses is high, especially with rates expected to continue to fall.
Why you should be worried
Any signs of a tax hike are inflation, and even though the effect might not be felt immediately, your wallets could become thinner once the effects start to trickle down into the economy, through a higher cost of living. Let us hope Rachel Reeves doesn’t pull any tricks, or we will be paying for all her treats.
Econ Oddities 
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