to think the idea of a mansion tax just penalises London and the south

(586 Posts)
Redpipe Sun 15-Sep-13 14:35:44

I will probably get flamed for saying this but I don't believe that owning a 2 million pound house automatically makes you rich. Certainly in London a 2 million will not buy you a mansion, more like a terraced family home.

AIBU to think that the idea just penalises people in the south?

Theincidental Sun 15-Sep-13 14:46:33

When people on benefits in central London had their housing benefit capped because the government didn't want to find the going rate for accommodation, many people said they should just leave London and get something they could afford!

That seems to me the more appropriate response to people in London with £2 million pound houses.

If they can't afford the mansion tax, with a property of that value, then go find somewhere they can afford.

Unlike people on benefits, they would have the luxury to afford moving costs and have sufficient funds from a sale to build a new life out of the city.

HalooJones Sun 15-Sep-13 14:47:52

Owning a 2 million pound house in the UK makes you rich, end of.

itsametaphordaddy Sun 15-Sep-13 14:52:19

A two million quid house doesn't make you rich? Are you friggin kidding?

BlameItOnTheBogey Sun 15-Sep-13 14:53:05

I agree that it does make you rich. But it doesn't mean that you must have tons of disposable income. We own a three bed semi in London that would likely cost less than a quarter of the price in the north. We are lucky we can afford it, but a mansion it ain't. We can't move to the north though because our jobs only exist in London.

Redpipe Sun 15-Sep-13 14:56:36

HalooJones but there are pensioners in 3 bed terrace houses which they bought years ago. They could find that the house soon goes over the threshold but their income could be quite meagre.

Theincidental The difference is though that people who own a 2 million house are not being supported by others taxes. However, they would be made to move because they are being asked to support others.

My OP is really more about someone who actually does live in a mansion in the north east and who might have a huge disposable income may not be taxed but a lower earner who has owned their house for decades in London may be priced out of their own home.

Even if your jobs are in very affluent areas of London, the transport links throughout London are such that if this was really a concern you could find a house (probably a choice of several thousand houses in fact) that costs considerably less than £2M. You could then commute, as hundreds of thousands of people do each day.
The Mansion tax is totally avoidable if you "can't afford" it. You only pay it if you want a nice house in a nice area in the SE or London, or if you want a mansion in a smart area anywhere else in the UK.

stubbornstains Sun 15-Sep-13 15:01:21

Out of interest, could you link to some three bedroom terraced houses in London that cost 2 million? Am intrigued....

HalooJones Sun 15-Sep-13 15:02:01

Why do some people think that moving out of London is beyond the pale?

Redpipe Sun 15-Sep-13 15:02:13

My neighbour bought his house 50 years ago, the area was working class then, as is he. His house is now worth well over 1 million (3 bed terrace) but there is no way on earth his pension would come close to paying for Mansion tax if prices keep going up. He drives a banged up 15 year old car and has to think about how much he can spend in the supermarket. Why should he have to move?
This scenario would not happen further north. I think this penalises Londoners and the south.

itsametaphordaddy Sun 15-Sep-13 15:02:43

But the person in the north wouldn't necessarily have a huge disposable income either. People in the north tend to earn less. In a lot of cases they earn a lot less.

If you own a £2 mil house and aren't rich then you must be pretty bad with money IMO.

Redpipe, if your elderly friend's £1M house goes up to over £2M, surely so will the threshold for mansion tax?

Binkybix Sun 15-Sep-13 15:05:29

I think I agree that it's unfairly penalising those in London, although I do find it difficult to have sympathy for those buying a £2million house - you can get something pretty nice in London for that, although maybe not in location of choice. I think stamp duty is actually far worse for this, and affects many more people.

Have to say,though, if you can afford to buy a £2million house, you are exceedingly rich!

Redpipe Sun 15-Sep-13 15:06:47

stubborn stains certain a 3 bedroom terrace not done up can fetch over a million in many areas of london. I'll try and get some links on here in a minute.

Haloojones Why should a retired person in their 80's born and bred in London move out because they have been taxed out. They are not asking for hand outs they have paid for their house and will pay huge death taxes on the property when they die. Why should they be taxed out of their own home?

Redpipe Sun 15-Sep-13 15:08:08


It's already well over a million and the rate at which prices are rising in London it probably won't be long. There is no talk of upping the threshold.

Also, if Redpipe's neighbour moved, he could free up substantial equity from his home. He could buy a smaller property, or move to a nearby area that has become less gentrified and live the life of Riley instead of hanging onto a valuable asset that's a millstone round his neck.

RedJeans Sun 15-Sep-13 15:08:29
HalooJones Sun 15-Sep-13 15:09:10

An 80 year old pensioner in 2 million pound house in London will have benefitted enormously from house price inflation.

WMittens Sun 15-Sep-13 15:09:17

and will pay huge death taxes on the property when they die

Can you explain to me how a deceased person pays tax?

RedJeans Sun 15-Sep-13 15:09:26

Oops, tunrs out thats four beds! close though

RedJeans Sun 15-Sep-13 15:10:36
Redpipe Sun 15-Sep-13 15:11:49


Someone earning an average income in the north is highly unlikely to be living in a property at or near the 2 million threshold just because they have lived there a long time and the prices have gone through the roof. In the south this can be the case.

HalooJones Sun 15-Sep-13 15:12:00

Are there any 3 bedroom houses in Belgravia? They'd be worth considerably more than 2 million I should think.

Redpipe Sun 15-Sep-13 15:12:49


Part of the property the deceased person owned will go straight to the inland revenue.

HalooJones Sun 15-Sep-13 15:13:10

An OAP wouldn't have to move out anyway, they could just sign some kind of contingency agreement to give someone a % of their house when they die.

Alisvolatpropiis Sun 15-Sep-13 15:14:02

Most taxes unfairly penalise someone in one way or another.

If the wealth is in London/the south in general that's just the way it goes.

As far as I know, there are plenty of expensive homes up North.

Agree there are 2mil terraces in London, granted they're not exactly tiny. Saw one I liked for sale when visiting a whole back, checked it on right move and nearly choked. Identical houses go for 500k in Cardiff (and that's still too much!)

Redpipe Sun 15-Sep-13 15:14:37


So you do think the elderley neighbour should have to move?

BTW it's unlikely a nearby area will be much different in price either.

RedJeans Sun 15-Sep-13 15:14:40
ihearsounds Sun 15-Sep-13 15:14:59
Binkybix Sun 15-Sep-13 15:15:13

Part of the property the deceased person owned will go straight to the inland revenue

I think the point is that the person who dies is not paying the tax - the person who inherited (not earned) a huge amount of money through luck - gentrification of an area - is paying it.

I live in a nice area in NW England, you could get half a dozen houses for £2M round this way.
Who keeps buying these ludicrously expensive houses? Surely to keep prices rising it must be a seller's market.

Redpipe Sun 15-Sep-13 15:15:38


Yes sign away their asset to the tax man.

Redpipe Sun 15-Sep-13 15:17:22


I understand that but my point is the inland revenue will benefit from the increased value of the home anyhow.

HalooJones Sun 15-Sep-13 15:17:57

Redpipe. Not the tax man. A private investor that would get a % of the value of the house when it is sold after the owners death.

Nancy66 Sun 15-Sep-13 15:18:06

former council house - now worth nearly £2million

Redpipe Sun 15-Sep-13 15:18:15

Thank you for the links Ihearsounds smile

HalooJones Sun 15-Sep-13 15:19:04

InMySpareTime: Russian Oligarchs and Saudi Oil sheikhs are buying the property. Not British people. London has become a playground for the worlds rich.

TheCrackFox Sun 15-Sep-13 15:20:45

How much are the Lib Dems hoping to raise from this? How much will it cost to administer?

Redpipe Sun 15-Sep-13 15:20:53

Thanks for the link.

Your neighbour could rent out a room in his 3-bedroom house if he's that hard up.
What's the point in living in an extremely valuable house as a pauper?
Personally, I think your neighbour would have a much better standard of life if he moved.
I'm not saying he "has" to move, but how does his situation benefit him, even now, without the tax?

ihearsounds Sun 15-Sep-13 15:21:46
Havea0 Sun 15-Sep-13 15:23:22

Redpipe. The 2 million pound house you are talking baout. Is there a mortgage on it?

Redpipe Sun 15-Sep-13 15:23:36


I'd like to know the same answer

mrsjay Sun 15-Sep-13 15:23:40

IF you can afford to repay a mortgage on a 2 million pound house then pay the bloody tax or sell it and move somewhere within your means,

mrsjay Sun 15-Sep-13 15:24:40

I mean the General you

I think the issue is less with taxes and more with the ridiculous way property prices can fluctuate; I live over an hour outside of London yet cannot afford to buy here because of high property prices. So using your words another way, that penalises those of us north of the M25.

Maybe instead of there being an "us" and "them" argument as to who's worse off or who suffers more or is more penalised, there should be more of a focus on hour the nation can exist all together so that there are no more extremes of wealth and poverty?

Binkybix Sun 15-Sep-13 15:27:21


I see, sorry - misunderstood you. I don't think I agree with mansion tax as long as inheritance tax is a hell of a lot harder to avoid.

Nancy66 Sun 15-Sep-13 15:27:44

But Mrs Jay the owner of a house worth £2million may well have bought it when it was worth £300k

Redpipe Sun 15-Sep-13 15:28:26


He's not a pauper FFS he's just a normal guy on a pension who is just fine. He benefits from living here because he was born and bred here as were his parents, he knows many neighbours. Just because he could free up cash if he moved away doesn't mean that would work for him. However, he could not pay the £20 grand a year in tax! It'd be more than his total pension.

Redpipe Sun 15-Sep-13 15:29:49

Mrs Jay
But many people bought their homes for a lot lot less. In some cases hundreds of pounds years ago. I think you're missing the point.

Redpipe Sun 15-Sep-13 15:30:51


I totally agree with your post, well said.

filee777 Sun 15-Sep-13 15:32:28

If you were a pensioner with a 2m house, why would you live with a low income? Sell it, buy something beautiful for 500k or less and have a fanatically easy retirement.

twistyfeet Sun 15-Sep-13 15:33:11

lots of poor people in London have to move away from family and friends in London as they cannot afford rent or mortgages. The diference is...?

mrsjay Sun 15-Sep-13 15:33:15

I think i might be and what littlewhitewolf said makes sense but these people could sell their homes I don't see why they should get any tax relief because it is an old family home

stubbornstains Sun 15-Sep-13 15:35:41

Wow, that's an eye opener. I had no idea that house prices had gone THAT crazy. How is this proposed mansion tax going to work- are they going to tax people already living in these properties, or only when they change hands? The question is how best to even out this hyperinflated market....maybe just tax the hell out of second homes? Or introduce a kind of "London weighting" so that the threshold is higher in London?

Chocolatehunter Sun 15-Sep-13 15:36:59

I live in the Welsh Valleys and have to almost laugh at the insistence of some that London is the only place to live. However i also think that the reasons for the high house prices are justified so there should be a tax on higher priced homes. In London you have 24/7 public transport that's relatively cheap and easy to use, we don't have anywhere near the same here. You have jobs that pay well and even in the recession official figures show that London and the South East were largely unaffected, we simply don't have jobs. We have some of the worst poverty in Europe with some of the highest child poverty. No wonder our houses are cheaper. I love in a gorgeous town house in a nice area for a price that wouldn't even buy a parking space in London. These options are available to everyone in London but they wouldn't want to join us in our area because of reasons mentioned above.

Redpipe Sun 15-Sep-13 15:37:17


Some might choose to move away and free up the equity but others may not. Some pensioners have be born and bred in the areas which have had massive increases. Their friends live there and they are staunchly working class and are happy with their lot and friends and familar surrounds may be more important to them than money.

My point is they should be able to choose in their late life.

Others may have seen massive increases in their properties but have children a local schools and therefore don't want to move. It doesn't mean they can afford a mansion tax though.

SomethingOnce Sun 15-Sep-13 15:37:48

I will probably get flamed for saying this but I don't believe that owning a 2 million pound house automatically makes you rich.

The thing to do would be:

Sell £2m house
Buy £650-£750k house
Feel rich.

TheSporkforeatingkyriarchy Sun 15-Sep-13 15:37:59

It's not "the tax man" that benefit nor is your neighbour being asked to "support others" - unless said pensioner actually doesn't take a state pension, never uses or has products delivered on the roads and never uses the NHS and so on and so forth. Unless you are arguing for a flat tax on all homes when bought or sold, I'm not seeing why the most expensive houses shouldn't result in higher tax just because more expensive homes are not evenly distributed throughout the country (because neither is the wealth...).

PrimalLass Sun 15-Sep-13 15:38:12

If anyone is considering paying over a million for one of those then, as they say, a fool and their money are soon parted.

Nancy66 Sun 15-Sep-13 15:39:03

My understanding is that the proposal is for the tax to be levied at people living in the properties.

So someone living in a £2million property may find themselves having to stump up £36k a year.

SomethingOnce Sun 15-Sep-13 15:40:26

Sorry, multi-cross post. Was so shock at ridiculous OP that I didn't RTFT.

mrsjay Sun 15-Sep-13 15:40:28

tbh it is just the opposite of the bedroom tax really

So the Long term Londoners may need to decide whether they value proximity to friends or school places highly enough to pay £36k a year for those choices.

Havea0 Sun 15-Sep-13 15:43:00

Redpipe. Be realistic. Travel around Britiain. 2 million is rich!!!!

Who cares whether he is working class, or inheritied wealth. He is still owning a £2 million house.

And I am afraid, even old people get to move sometimes.

Not saying I agree with the mansions tax. But at least get real about it.

squeakytoy Sun 15-Sep-13 15:43:55

ihearsounds Sun 15-Sep-13 15:21:46
Oh and here are a couple of one beds.

The first one is the price for the block and includes FIVE apartments. The second one is in Knightsbridge which is one of the most prestigious parts of London, so is bound to be exceptionally high.

There are thousands of other properties in London which are nowhere near the 2 million mark, and if a pensioner lives in one, but is struggling financially, then they should downsize and sort their finances out.

Havea0 Sun 15-Sep-13 15:45:29

Yes it penalizes London and the South. So what?
Is Lonodn and the South, special?

SomethingOnce Sun 15-Sep-13 15:46:43

lots of poor people in London have to move away from family and friends in London as they cannot afford rent or mortgages

Exactly. I live where I grew up but gentrification and the premium on family homes means I seldom meet anybody else who did.

Redpipe Sun 15-Sep-13 15:47:40

"lots of poor people in London have to move away from family and friends in London as they cannot afford rent or mortgages. The diference is...?"

I think both are bad but there is a fundamental difference.

People priced out of the market are effected because they can't pay for themselves in that area. Lower income families who are being made to pay mansion tax are being asked to pay massive amounts for others (through tax) regardless of their income.

PrimalLass Sun 15-Sep-13 15:48:10

My understanding is that the proposal is for the tax to be levied at people living in the properties. So someone living in a £2million property may find themselves having to stump up £36k a year.

I know, but prices have risen that high because some fools are willing to pay it. Mainly foreign billionaires trying to get there money out of failing European economies. They have to tackle it depending on who owns the property.

NotDavidTennant Sun 15-Sep-13 15:48:31

ihearsounds: "Oh and here are a couple of one beds."

That first one you linked to is actually a whole block of apartments. grin

Can anyone show me one of these £2m family homes which is in an ordinary London neighbourhood and not some abode of the mega-rich like Marylebone or Kensington?

nancerama Sun 15-Sep-13 15:48:32

When stamp duty was introduced, that was a tax on the rich only. The majority of home owners now need to pay it.

If inflation carries on as it has been and if house prices continue to rise, there's a danger that the "mansion tax" will be a home owners tax in a couple of decades.

Redpipe Sun 15-Sep-13 15:49:13


So if a pensioner lives in one and isn't struggling but is not rich should they have to move?

Redpipe Sun 15-Sep-13 15:50:04


This is true.

catgirl1976 Sun 15-Sep-13 15:51:19

£2 million3 bed flats do exist "up North" you know.


catgirl1976 Sun 15-Sep-13 15:53:47

Or here

Only 2 beds for your £2 million in Manchester

Redpipe Sun 15-Sep-13 15:54:04
Redpipe Sun 15-Sep-13 15:55:07


Of course they do but they are very unlikely to have been bought as a cheap family home years ago.

This is my point

StuntGirl Sun 15-Sep-13 15:56:10


KatyPutTheCuttleOn Sun 15-Sep-13 15:56:59

NotDavidTennant here

Chocolatehunter Sun 15-Sep-13 15:57:15

Lots of posters are talking about being priced out of the London market or not being able to live where they were brought up. What do they happens to all the people who have to move to find jobs? Usually to places like London. Hardly any of my childhood friends live where we were raised, there simply are not enough jobs for us all. What about an outcry for all those people who cant work where they were raised?

catgirl1976 Sun 15-Sep-13 15:57:32


But if they were bought as cheap family homes years ago, they will have tonnes of equity in them

So the occupants probably could be classed as well off

Redpipe Sun 15-Sep-13 15:57:42
Redpipe Sun 15-Sep-13 15:59:17
Binkybix Sun 15-Sep-13 15:59:23

Sell the 3 bed and buy a 1 bed in the same area. Cash left over, no tax to pay!

Redpipe Sun 15-Sep-13 16:00:31


But it doesn't mean that have £20K extra disposable income every year to pay for others does it. I just think they shouldn't have to move in order to pay for others

Redpipe Sun 15-Sep-13 16:03:04


And where are all the 1 beds going to suddenly appear from? It'll only serve to push the price up for first time buyers.

SomethingOnce Sun 15-Sep-13 16:03:52

But that's the point: if they downsize they won't be paying for others!

Redpipe Sun 15-Sep-13 16:03:59


People priced out of the market are effected because they can't pay for themselves in that area. Lower income families who are being made to pay mansion tax are being asked to pay massive amounts for others (through tax) regardless of their income.

squeakytoy Sun 15-Sep-13 16:04:01

"So if a pensioner lives in one and isn't struggling but is not rich should they have to move?"

yes! its not as if they would be out on the streets living under an archway in a cardboard box!

twistyfeet Sun 15-Sep-13 16:04:56

They can move. My inlaws live in a very nice 4 bed detcahced in Ealing. Only worth a million. That would free up a mill for your poor hard up pensioner from Knighsbridge then.

Redpipe Sun 15-Sep-13 16:05:15

But why should they be forced to downsize, leave a home which they have spent most of their lives in because the tax system requires them to pay massive amounts to others.

Just to clear up a misapprehension on this thread:
new statesman article explains it's not 1% of the total house value, it's 1% of the value over £2M.
You'd only pay £20k a year if your house was worth £4M. Not that many three bed terraces in that category.

SomethingOnce Sun 15-Sep-13 16:06:04

Where will the 1 beds come from?

Recently vacated by late twenty/early thirty-somethings who are holding off starting families until they can move somewhere suitable, I'd have thought.

Redpipe Sun 15-Sep-13 16:06:56


But why should someone in retirement (my neighbour) move to ealing which is not only miles away but give up all the memories from the family home because he is required to pay for others?

Redpipe Sun 15-Sep-13 16:09:28


Nice response hmm

Redpipe Sun 15-Sep-13 16:10:12

Thank you inmysparetime

Redpipe, there are too many "if"s in your neighbour's case.
He'll only need to pay some tax if his house almost doubles in value from its current level, by which time his pension income will have risen with inflation too, and by which time (statistically) he will likely have either passed on or have moved to a care home anyway.
If his house is worth £2.1M his tax bill would be £100, for a house that he's lived rent-free in for decades.

SomethingOnce Sun 15-Sep-13 16:12:13

Retired people's memories are more valuable than everybody else being able to live in life-stage appropriate accommodation, then?

Theincidental Sun 15-Sep-13 16:12:20

We are in a recession caused by the uber rich frittering away billions and billions of everyone's money.

As the Tories say: we're all in this together.

Every single person I know has made sacrifices and cuts to their personal budgets and lifestyles. So far the people who have born the brunt the most are those on the lowest incomes with. The most to lose.

If a rich pensioner in a £2 mil house can't make a sacrifice too, then it's pretty disgusting, selfish society we live in.

That person and virtually everyone in this country has contributed and used the welfare state throughout their lives, so it doesn't matter that the OP's perception is that their contribution has more "worth" to society.

Dawndonnaagain Sun 15-Sep-13 16:13:09

The tax system requires that they pay an amount to the police, the education system, the health service. hmm
Oh, and according to fridays figures here it isn't a massive amount. As little as £19.00 per week in some cases.

Binkybix Sun 15-Sep-13 16:15:51

And where are all the 1 beds going to suddenly appear from? It'll only serve to push the price up for first time buyers

Only if the numbers of people who live in £2million houses, and choose to downsize are high enough to affect the market. I don't know if the numbers are sufficient. Do you? Also, freeing up that amount of cash would hardly put you in the lower house bracket for 1 beds - which is where majority of first time buyers would be looking. The converse of your argument is that supply of the £2million houses would increase, therefore reducing cost of these 'normal' family homes (which are still in v pricey areas of London).

I'm not sure why I'm arguing though, as something in me is uncomfortable with a retrospective tax that could add up to £30k pls a year! I suppose it has to come from somewhere though.

Redpipe Sun 15-Sep-13 16:18:13


"Retired people's memories are more valuable than everybody else being able to live in life-stage appropriate accommodation, then?"

WTF I really don't understand where this has come from.

Chocolatehunter Sun 15-Sep-13 16:18:26

Redpipe you haven't really answered my point. Plenty of people can't live where they were raised (I was raised in the South Wales valleys) they are forced out because they have to work and there are few jobs. Yet there's never an outcry then.

However when it's London everyone is up in arms. It smacks of NIMBYism because apoarantly we should all be concerned for those poor people with huge amounts of wealth tucked away in equity being 'priced out of the market' when they could easily live elsewhere very comfortably, like the rest of the UK.

PurpleGirly Sun 15-Sep-13 16:18:29

My parents had to move. Lots of my family had to move ... Why is this man so different? I am sure many people who have family who have downsized to enjoy a long and happy retirement.

By the way the 5 bedrooms house in Dulwich is detached, not a 3 bed terrace. The other one is Wimbledon. I could go on rightmove now and show lots of 5 bed detached houses across the country for the same price ( not all of the country but some of it) like this one

SirRaymondClench Sun 15-Sep-13 16:18:31

I agree with you Redpipe.

As to all the posters saying he should sell his house and move into cheaper, he has bought and paid for his house and no doubt paid a fortune in taxes over the years. He is a pensioner and this is his home. Why should he have to move? hmm

Binkybix Sun 15-Sep-13 16:19:15

Oh I see it's not 1% of total value - that's very different then. But how much would it raise?

Redpipe Sun 15-Sep-13 16:19:24


If his house is worth £2.1M his tax bill would be £100, for a house that he's lived rent-free in for decades.

It would be 1 thousand pounds not 1 hundred

Redpipe Sun 15-Sep-13 16:22:47


I can't explain it better than I have sorry.

I stand corrected, but the point remains, it's unlikely to be a huge tax burden, and it won't hit your neighbour for a number of years, even assuming house price inflation in London increases at its current ridiculous rate.

Redpipe Sun 15-Sep-13 16:26:12


They are not having to move to free up cash for themselves for living or having to move because theycan't afford the area, they are having to move because the government wants them to pay more tax to subsidise those less well off.

Vickibee Sun 15-Sep-13 16:28:13

Council tax as it stands does not affect ability to pay either, once you have reached a certain level of income you hav to pay, for some it is a high percent of disposable income eg if you are on new. This is why ther is in incentive to work as benefits claimants get it paid or most

MrsCampbellBlack Sun 15-Sep-13 16:28:14

To be honest, I really struggle to feel much sympathy for a generation who have benefitted so much from the house price rises over the last 20+ years.

Your neighbour will have to make a decision as many people do when they reach a certain age, ie, to downsize and free up some capital to make their retirement more comfortable.

I feel a lot more sorry for those people who are never going to be able to buy a house because of the craziness of the property market.

SomethingOnce Sun 15-Sep-13 16:28:17

Redpipe, you were concerned about your neighbour having to give up memories because of having to move house (not that moving usually causes amnesia, but anyway...).

My point is that that is a rather indulgent argument for wealthy retirees not to be expected to either downsize or pay the mansion tax.

Vickibee Sun 15-Sep-13 16:28:41

Nmw not new

Binkybix Sun 15-Sep-13 16:31:11

But that's how tax works. You could equally say why should I have to pay high levels of income tax to provide more for others than I take out, which limit further where I can live in London? Tax has to come from somewhere - it's just who you choose to penalise isn't it? In some people's eyes the option to cash in to the tune of £100k would be a very nice problem to have.

FairPhyllis Sun 15-Sep-13 16:31:28

Someone who owns a 2 million pound property is wealthy, even if they don't have a lot of cash.

People (especially working class people) have always had to be pretty mobile in response to their circumstances, so I find the preciousness about 'keeping communities together' rather hard to understand. Just looking at my own family in the last century - all working class - every single generation on both sides was super mobile. They moved countries if they had to in order to find work. I have too and expect I will move in the future if circumstances dictate. That's just what you do. I don't know why wealthy pensioners who live in London should be a special case.

I think OP is correct that this is a tax on having wealth concentrated in the SE, but why shouldn't it be? Living in London and the SE is a privilege, not a right. Londoners have easy access to cultural and economic opportunities that the rest of the country doesn't have because Labour did bog all to build growth outside London.

OP's friend is not going to be affected by this anyway, so I'm not sure why he is coming into this at all!

Redpipe Sun 15-Sep-13 16:33:14

So they should just suck it up and move out of the area away from friends and family or move into a 1 bedroom flat locally. shock

The level of empathy on here is shocking.

MrsCampbellBlack Sun 15-Sep-13 16:37:01

Its not lack of empathy Redpipe - its just others are more deserving of my outrage/sympathy.

Come on, he could downsize to a 2 bed £1m house and hardly be living in shitsville.

Its what many many older people do when their families leave home.

SomethingOnce Sun 15-Sep-13 16:38:56

Everybody has to cut their cloth.

Would you rather single/couple retirees rattle around four-bed family homes while younger people raise families in small flats with no gardens? Or just don't have families? (These children will be the workforce that supports an ageing population.)

SomethingOnce Sun 15-Sep-13 16:39:42

And it's not a lack of empathy, it's just realistic.

Redpipe Sun 15-Sep-13 16:41:50


There is a major difference between moving for personal reasons/needs to find work etc. and having to move because the government are taxing you out of your family home.

I cannot believe posters cannot see the difference. I shall leave it there.

Redpipe Sun 15-Sep-13 16:43:30


everybody has to cut their own cloth these people are being asked to fund others at the cost of forcing them to leave their own homes.

I give up.

SomethingOnce Sun 15-Sep-13 16:45:24

The government taxes me out of stuff I want but that's just how it goes.

The government aren't taxing people out of their family homes, the rising cost of housing is.
Hopefully the "mansion tax" would act as a brake on house price inflation, as more house values are kept just below the £2M mark.

BrokenSunglasses Sun 15-Sep-13 16:46:07

I agree with you OP, it does penalise those who live in the south, and it punishes people, for something they had no control over.

This is just turning into a bash the wealthy thread, and it's being aimed at people who might not actually be all that wealthy.

If pensioners are going to be forced to move because house prices have risen and their incomes don't match, then why should a pensioner in a council property get to keep their home until they die? I know plenty of people on MN don't agree that they should, I'm not one of them. But this mansion tax could easily end up with people who have contributed less being better off than those who have contributed little. We already have that situation to an extent, and the last thing we should be doing is making that worse.

It would be much fairer if this tax were based on the value of a property relative to the value of the average property in the area. That way it would catch people who really do live in mansions in cheap areas up north, and wouldn't penalise those who live in bog standard properties that just happen to be in areas where prices have dramatically risen.

MrsCampbellBlack Sun 15-Sep-13 16:48:03

I'm not attacking the wealthy. I've lost my child benefit but know in the scheme of things, we can afford that. And that you know people tend to have less sympathy for the well off having to make a few sacrifices than those who are struggling to feed and clothe themselves.

And I fail to believe that someone couldn't find somewhere reasonable to live for £1m even in nice bits of London.

Binkybix Sun 15-Sep-13 16:49:13

I get taxed which means I can't live where I want either - without the bonus of unearned increases in property making me £100s k through. Oh, and the fact that your theoretical pensioner could still live in the area he wanted, but in a smaller place. What's so awful about only having one bedroom for 1 person?

SomethingOnce Sun 15-Sep-13 16:49:48

these people are being asked to fund others at the cost of forcing them to leave their own homes.

It's 'fund others' or make a different choice.

(Tbh, I prefer 'fund others' to 'fuck others' but I'm not a Tory so I would say that smile)

Binkybix Sun 15-Sep-13 16:51:47

And I've not got anything against the wealthy - just think that tax needs to come from somewhere!

HalooJones Sun 15-Sep-13 16:53:40

Taxing expensive houses is a very good idea as you can't move them overseas.

Redpipe Sun 15-Sep-13 16:53:56

somethingonce and Mrscampbellblack

I am fairly certain you can't see passed the property price so I'll leave it there as there is absolutely no point debating.

LalaLeona Sun 15-Sep-13 16:54:29

..and where is your empathy OP? For the rest of the country's young (and middle aged!) people wo can never ever get onto the "property ladder"?

Chocolatehunter Sun 15-Sep-13 16:55:31

Redpipe where is your empathy for the families who have been dragged around the country because there are no jobs and they have to move to get any sort of income? Or are we reserving sympathy solely for a rich pensioner who lives in London. This is the problem, it's all outrage when it comes to London but when IDS says that working class people ought to get on the bus for work ticket to the mythical land of jobs please then that's seen as justified. I'm sorry for your neighbour but he has more than enough equity in his house to be able to live a very comfortable and stable life somewhere else, unlike those who are on the bones of their backside because they cant get jobs.

Redpipe Sun 15-Sep-13 16:56:05


Actual I have loads of empathy for the people who can't get on the property ladder what leads you to believe I don't? How bizarre?

Redpipe Sun 15-Sep-13 16:57:26


Please point me to where I have shown no empathy and the debate about people who have been dragged around the country because there are no jobs? Why are you putting words in my mouth?

MajesticWhine Sun 15-Sep-13 16:58:27

Extra taxes have to be raised somehow due to the terrible state of this country's finances. I agree it seems unfair for those on low income in high value properties. But no taxes are going to be popular. OP, what alternatives would you suggest for raising tax and tackling the deficit?

Redpipe Sun 15-Sep-13 16:58:44

two wrongs don't make a right Chocolate, I can find empathy for all parties

Jolleigh Sun 15-Sep-13 16:59:48

IMO (which may of course be ill-informed) if you can afford to effectively sit on £2m, regardless of whether you bought the house for that price, then yes, you are rich. If you live in a £2m house and are really struggling financially then you're a rich person who isn't yet making the right choices.

About the tax penalising Londoners, I'd rather have a single rule for the whole country than add yet another division between the north and south.

I don't live in London because I can't afford to.

Redpipe Sun 15-Sep-13 17:00:48

Good point.
Hmm, I would probably start with hard line on corporate tax evasion rather than making pensioners move home.

SomethingOnce Sun 15-Sep-13 17:00:51

I can see perfectly well past it.

Property has taken over from savings. Property values have risen, savings rates barely keep up with inflation. Were savings rates decent, one could expect to be taxed on the interest - I don't see a huge difference.

Redpipe Sun 15-Sep-13 17:04:08


The prices have really only gone absolutely crazy in the last 6 years. Some of these people were 80 years old then, not exactly the age to say "right have you seen the price of our property now, lets move." at say 86!!

PurpleGirly Sun 15-Sep-13 17:06:41

Red pipe you appear to live in a bubble - so many people have to downsize to afford to live and pay the taxes they have. Your OAP is no different - he just has to pay more tax as he has a house worth a lot of money. That is how it works. It's all very well for you to state other people don't get it, or cannot see beyond the property price - it is all relative. Have you spoken at length to your neighbour - he may be fit and healthy now but can he cope in a big house, is he lonely, will he be warm in winter? Surely common sense would lead family to helping him make a decision to keep him safe, warm and financially secure?

MrsCampbellBlack Sun 15-Sep-13 17:08:49

I can see past the property prices - of course I can. But times are tough, a lot of people are having to make decisions now that they didn't envisage having to make.

What's going to happen to our generation when they want to retire and pensions just aren't going to cut it? There will be an awful lof of downsizing going on then.

And yes, it is sad if someone had no intention of moving has to because he can't afford the 'mansion tax'. But either he has to move, do some dodgy equity release scheme or get subsidised by his family.

But at least he has decent assets and therefore has more options than many people.

SomethingOnce Sun 15-Sep-13 17:09:38

I'll bet a few people who live in £2m+ homes work for the very same corporate tax avoiders.

This could be regarded as a two-pronged approach.

BrokenSunglasses Sun 15-Sep-13 17:14:06

Binky, I agree that tax needs to come from somewhere, but there are better ways of doing it.

It would be better to have a higher rate of VAT on luxury items (I mean properly luxury items like windows with self closing curtains or designer shoes, not Jaffa cakes) because then you would actually be taxing people relative to their disposable income.

Redpipe Sun 15-Sep-13 17:15:13

He loves living on the street. He has known some of his neighbours for 40 odd years. Yes he can cope in the house (which is not that big). He is not fit and healthy (lost an eye in the war and has a limp) which is why he likes living here as neighbours muck in with shopping etc. No, he's not lonely, mainly because he knows so many people locally and can stop and chat on the street and yes he's warm in winter.

I understand people downsize for all sorts of reasons. I don't live in a bubble. He also pays tax like all other pensioners and as a working class man saved and made decisions when he retired 20 years ago as to his affairs. This tax could dramatically change his life.

Redpipe Sun 15-Sep-13 17:16:31


Just because he has more options doesn't mean we can't feel sorry for him?

Quangle Sun 15-Sep-13 17:18:53

I'll put my hand up as someone this could affect one day. My three bed terrace cost£750k and is now worth probably double that four years on (it was derelict when I bought it). It's only about 1200 sq ft so pretty ordinary as houses go. No garden to speak of. I've been in this area for twenty years, grew up in London, all family within twenty minutes of us. Children all at local state schools. Job only available in London so moving out really not an option for us.

I read that at current rates of house price inflation we could fall into this tax bracket in five years. £36k in additional tax every year would be almost all my income so we'd have to move but where? Everyone in my street would have to move but if we all moved to the next borough along those house prices would get pushed up the way ours have been pushed up by international buyers and we'd be back to square one.

It is a bit of a worry. Not expecting sympathy! I know I'm lucky to own a home in London but it comes to something when owning an ordinary house in your home town, close to family and the children's school, is almost impossible for so many people and will become so for me if this goes ahead.

SeaSickSal Sun 15-Sep-13 17:18:59

Other taxes disproportionately target the poor in the north, e.g. VAT, as we are paid less so it is a greater proportion of our income.

SirRaymondClench Sun 15-Sep-13 17:20:41

Bizarre that some of you who would champion the right for a pensioner to stay in their 3 bed council house they have lived in all their lives, would be more than happy to have this pensioner move out of his house that he bought and paid for simply because the price of it has gone up.

There really do seem to be some jealous people about hmm

timidviper Sun 15-Sep-13 17:22:30

Government policies from the Thatcher era onwards have always favoured the South East so you are rather naive to expect northerners to feel sympathy for someone in an expensive house the equity in which has been acquired by the boom in prices caused by government policies which allowed the South to prosper while the North was decimated.

I'll save my sympathy for those pensioners in the North living in poverty in cheap houses because government policies destroyed the jobs and communities their livelihoods and property prices depended on.

SomethingOnce Sun 15-Sep-13 17:22:54

MrsCB, it's possible we'll end up with generations sharing homes as was often the case in the not too distant past, or as happens in families from cultures where it is not considered undesirable. I think we've arrived at a strange place where families are scattered and older parents live alone, miles from their DC and DGC, in their dotage.

My own DM is strangely resistant to the idea but she's a Boomer so has certain expectations.

Quangle, it's only 1% of the value above £2M, your house would have to rise in value astronomically to land you a £36K tax bill.

Chocolatehunter Sun 15-Sep-13 17:25:07

redpipe please link me to the place on this post where you have shown empathy for those families. Let's put it another way, you are neighbours with a person who lives in a house worth a great amount of money. My bets are that your house is also at risk of the mansion tax and actually you wouldn't want to pay it, which is completely natural. People who live in London already gain from a whole host of advantages which other people living outside of London don't have.

Misspixietrix Sun 15-Sep-13 17:25:33

^ What TheIncidental sai

Misspixietrix Sun 15-Sep-13 17:26:13

Said even.

MrsCampbellBlack Sun 15-Sep-13 17:26:21

I'm not jealous. Why would I be?

And I said I felt sorry for the man but you know he does have options. Its not as though he's being made homeless. He may have to move to something smaller or as I said before he could release some equity in his house to pay the tax.

And when cut backs are happening all the time in public spending - well I just don't think there is going to be a great deal of sympathy for people who are forced to pay the mansion tax.

HavantGuard Sun 15-Sep-13 17:28:12

A £2million limit on mansion tax would exempt the vast majority of people in the South East. Where people in the South East do get unfairly penalised is the lower end of the stamp duty threshold.

It makes no sense that the first band kicks in at £125k (1% of purchase price) and the second at £250k (3% of purchase price.) Those figures mean that it's bloody hard to get a one bed flat without stamp duty in much of the South East. It impacts many areas of the UK, but the South East more than others. Added to that, the fact that someone buying a property that costs £550k pays the same percentage stamp duty as someone buying a property of £950k does not seem fair.

I would like to see the starting point moved from £125k to £200k, so any less than that means you don't pay stamp and the other bands adjusted too so the 4% band moves to £750k to £1million.

topicsactiveimon Sun 15-Sep-13 17:30:53

"But why should they be forced to downsize, leave a home which they have spent most of their lives in because the tax system requires them to pay massive amounts to others."

My lord but the entitlement of the wealthy never ceases to amaze. Those of us in homes worth considerably less than £2m have to move and downsize and make adjustments all the time for financial reasons. I'm unclear why being wealthy makes you exempt from... life?

One, you have the tax wrong, as InMySpareTime pointed out, so all this fury over your wealthy neighbour's situation is a bit pointless. And two, yes, without exception, anyone with a saleable asset worth £2m is wealthy.

SomethingOnce Sun 15-Sep-13 17:30:54

It took a whole seven pages before the ol' Politics of Envy argument got wheeled out.

Redpipe Sun 15-Sep-13 17:33:15

redpipe please link me to the place on this post where you have shown empathy for those families.

Seriously? I have been replying to posters in regard to my OP. The OP is not about the numerous other problems that society has like moving for work etc. FFS!

Redpipe Sun 15-Sep-13 17:34:30

havant gard

That is a really good point

expatinscotland Sun 15-Sep-13 17:37:01

I've fucking heard it all now! If you have a property worth £2m you're not rich. F.F.S.

BangOn Sun 15-Sep-13 17:38:06

Yabvvvu. Anyone in a £2m home can take some of the pain being dished out to the poor, disabled, ill etc.

topicsactiveimon Sun 15-Sep-13 17:38:43

The stamp duty point I completely agree with, particularly for first time buyers in the SE. I wouldn't want to be young again and trying to buy my first London home.

Quangle Sun 15-Sep-13 17:38:50

Oh maybe I misunderstood sparetime. The description I saw was of a standard £2 or ££3k per month. But if it was 1pc of value over £2m how would they value it with house prices fluctuating so much?

It's all very difficult. I understand where this policy and, at the other end, the benefit cap come from but they have some really odd and unintended effects, mostly because of the problem of London house prices being so out of control. We are already seeing our school demographic changing because of the benefit cap.

LalaLeona Sun 15-Sep-13 17:41:28

The mere fact that you asked this, frankly naive question in the first place, shows a lack of empathy and understanding of lifestyles different o those of you and your neighbour.

SirRaymondClench Sun 15-Sep-13 17:41:32

Somebody who has a house worth £2mil will have worked to pay for that and has paid a lot in tax their whole life and thus supported the poor, disabled, unemployed.

topicsactiveimon Sun 15-Sep-13 17:45:00

Yes, SirRaymond, they will have worked hard for it. And for their efforts they now own a £2m asset that they can cash in. I'd say that's a pretty impressive reward for the work and taxes paid. I wish them well with their £2m, I'm glad they have benefitted, but that does not make them any less wealthy.

SomethingOnce Sun 15-Sep-13 17:47:32

They might've inherited the £2m house.

topicsactiveimon Sun 15-Sep-13 17:49:45

I don't think it matters how you came by the £2m, hard work, inheritance, whatever. If you've got £2m, you are rich.

LalaLeona Sun 15-Sep-13 17:53:09

Exactly topics. The fact that many people benefitted massively from the house price rises due to luck rather than judgement, or whether they worked for it, is irrelevant. As someone up thread said, if you are sitting on a 2m saleable asset then you are wealthy. It's quite simple!

marriedinwhiteisback Sun 15-Sep-13 17:58:01

OK our london home (since 1992) has been valued as worth 2.8m in it's current state, 3.4 if we spend about 150-200k on it. It's Vict semi (with about 9 inches between it and the next house) has 6 beds and downstairs space because it has been extended to within an inch of its life. A mansion it isn't.

Mansion Tax alert: at the beginning of the year DH bought an unloved gated townhouse in zone 3 for 975 (ish) we have spent *bout 150 on it and it has been valued at 1.4.

Our main house will now be refurbished and sold with no CGT - the differential has already gone into zone 2 two bed flats in trust for the DC

We have thus avoided the mansion tax, avoided CGT and planned for IHT. All perfectly legally, all in a way that suits us because there is no. Way we will pay more tax than we have to

Has been a hard year though combined with a new full-time job but really looking forward to the new arrangements now. .

timidviper Sun 15-Sep-13 18:02:05

Yes they will have worked hard but take the examples of two old men who work equally hard and earn similar wages, one in the North and one in the South.

The one in the North will have much less equity, in fact in some areas his house could be worthless as government policies destroyed industry and the communities around there. Homes in areas which relied on industry are almost worthless as there are few people wanting to buy in. His children all have to move away from the area to find work so he also ends up isolated. Health and life expectancy in those areas is also compromised.

The one in the South ends up with a huge amount of equity, not as much through his own hard work as through geographical good fortune

I will save my sympathy for those who have not had money handed to them on a plate by the policies of successive governments

LalaLeona Sun 15-Sep-13 18:02:42

Well there you go then, there are always ways round these things. It's just a ridiculous thing to moan about! Talk about first world problems..

FairPhyllis Sun 15-Sep-13 18:02:50

There is a major difference between moving for personal reasons/needs to find work etc. and having to move because the government are taxing you out of your family home.

Why is it any different? Both are the direct result of successive governments' policy. One could equally say that I have to move to find work because the government have failed to provide economic opportunities in my area. How very dare the government not lay on a job for me exactly where I want to live so I can live near my family! hmm

btw I do feel sorry if someone has to move when they don't want to, because I've experienced it myself. But someone sitting on a 2 million pound house is someone who has considerably more options than, well, almost everybody else. Moving because you can't afford the tax is no different to moving because you find you can no longer afford the maintenance/heating/council tax for the property. Which happens all the time.

And I'll say it again: this tax does not apply to your neighbour as his home is worth 'only' between 1 and 2 mil. It sounds like you live in a very affluent area. Is your home one of those which would be eligible for the tax?

TartinaTiara Sun 15-Sep-13 18:03:28

Meh. If you own a property valued at over £2m you're either on a high salary and able to service a huge mortgage, or you've benefited massively from rises in property prices and so have effectively received £2m of unearned income. So you're rich. And should pay into the system appropriately.

dojonoodle Sun 15-Sep-13 18:11:06

If you own a house worth 2 million plus, of course you are rich. If you don't think so, you are v naive. Maybe not cash rich but plenty of equity there if you need it.

Yes, it is tough for individuals to have to move/ make changes to their lifestyle but why should the rich be exempt from this?

married has just given a perfect example of how easy it is for the rich to avoid taxes. They have options which simply aren't available to the great majority.

SomethingOnce Sun 15-Sep-13 18:16:22

Out of interest and I you don't mind my asking, married, would you say that you are rich?

twistyfeet Sun 15-Sep-13 18:19:56

paying tax benefits everyone. We get hospitals, roads, police blah de blah de blah. The OP seems to think the poor pensioners tax will only be going to 'scroungers'. London is an expensive city to run.

marriedinwhiteisback Sun 15-Sep-13 18:27:33

No, I wouldn't say we are rich in the context of SW/West London. Here we are comfortable and surrounded by people who own companies worth tens and tens of millions.

If we bought a 2 million property in Yorkshire, ie, a real mansion I don't think we could afford to maintain it and retain our capital over the next 20-30 years.

Amongst our contemporaries and the families the DC go to school with, we are pretty ordinary and low key.

Redpipe Sun 15-Sep-13 18:30:27

"The OP seems to think the poor pensioners tax will only be going to 'scroungers'. "


StarfishTrooper Sun 15-Sep-13 18:39:59

Does anyone know how the value of properties will be assessed for the mansion tax? Valuations can be wildly different between various agents and surveyors? Will an army of mansion tax assessors be appointed at great public expense?

SomethingOnce Sun 15-Sep-13 18:41:21

Thanks for answering, married. It's interesting to hear how it all feels relative, even when to the majority of people (nationally and globally) you would seem to be rich.

Nancy66 Sun 15-Sep-13 18:44:36

Starfish - that's one of the worries about the proposed tax. who does the valuation and how accurate will it be? Will the property owner be able to dispute the valuation?

Seems very badly thought through

StarfishTrooper Sun 15-Sep-13 18:54:48

Wouldn't simply reviewing the council tax bands be a more appropriate way of applying higher taxes to those with very expensive property?

Crowler Sun 15-Sep-13 19:37:19

Oh. Here's marriedinwhite again talking about her money. Again. What a terrific shock.

I don't think it makes much sense to tax people after the fact, does it? If this were grandfathered in, fine. But I agree that it makes more sense to review the council tax bands. They top out at 500K in Hammersmith & Fulham if memory serves.

marriedinwhiteisback Sun 15-Sep-13 19:42:35

Beg pardon crowler. You can have honesty when an opinion is requested on a public forum or we can all pretend and proide no diversity. I could get as irritated at those who rely on lentils and goats but try to have a little more grace.

Now avert your green little eyes and focus on your own nearest and dearest without vitriol.

One of the problems with the idea of the mansion tax is taxing an asset after you've purchased it. If you agree to this for "rich people" how long will it be before a politian decides you have too much valuable stuff and demands a tax on it.

Binkybix Sun 15-Sep-13 19:53:02

To be fair, married, it was a slightly odd post as you just told us about your situation rather than opining on the topic. Having said that, I will totally admit to being jealous! smile

Havea0 Sun 15-Sep-13 19:55:52

op. I am pretty sure if it were to hapen, that there will be money firms in an instant, willing to do some sort of deal with him so that he can stay where he is.

sillyname Sun 15-Sep-13 20:02:28

Just a thought. Lots of pensioners are reluctant to move from houses that they have lived in for years, benefitting from them going up in value massively. If they sold and released the equity, which after all, is unearned and purely down to luck, many of them will be over the threshold for state funded supporting have to contribute towards the care and support they receive.

Crowler Sun 15-Sep-13 20:13:13

Marriedinwhite, why do you assume I'm jealous? I'm curious.

I just find it strange that you are so keen to discuss your finances, over and over again. It seems as though you're courting jealously.

As for the goats and lentils, you've got me - I have no idea what you're talking about.

dojonoodle Sun 15-Sep-13 20:16:40

In fairness, married, not a single other person on this thread has mentioned their personal financial details but you have chosen to without referring to the OP.

I doubt whether anyone thinks of themselves as rich because they always know plenty of people who are richer. They chose to compare themselves to their wealthy acquaintances in SW London rather than everyone in the country, paying into the same tax pool.

Crowler Sun 15-Sep-13 20:17:58

I think SW London is particularly vexing in this way. One loses perspective.

WhataSook Sun 15-Sep-13 20:36:23

I think married's post was very interesting, and why cant she gives us details? Far more interesting than 'those bastards in London deserve to pay prop up the rest of the UK' posts.

I live in London, my house has increased by a stupid amount since I bought it in 2010, no where near mansion tax level but I would be fucked off if it did get that high and I had to pay and I would hope I could find someone as smart as married did to work around it.

Binkybix Sun 15-Sep-13 20:43:09

It's just that is struck me as an odd post because it was just saying how they are avoiding tax, rather than discussing the merits of a 'mansion tax', which the OP was about.

CaptainUndercrackers Sun 15-Sep-13 20:45:09

I just don't understand where the valuations are going to come from, and how long they'll be valid for. I live in south east London, in a fairly ordinary area, not rough and not posh. House prices on our road have jumped by about 20% since we bought 4 years ago. But these big jumps have been very recent - prices were fairly static for a while. And prices of similar houses on other roads just a few hundred metres away are different. Next month who knows - things could go up or down. In London prices seem to fluctuate wildly from one week to the next. The only value you can really count on is the agreed price at point of exchange. So who is going to decide what houses are really worth, and how often will they adjust the valuations?

SomethingOnce Sun 15-Sep-13 20:46:06

I think married was just making the point that the wealthier one is, the easier it is to streamline one's tax affairs.

It's sad but true.

WhataSook Sun 15-Sep-13 20:47:02

Well I think her stance is pretty clear, they will have to pay the tax, even though they dont live in a mansion, just an ordinary terrace where they bought before it gentified and now is worth a stupid amount, and they dont want to pay it... pretty clear really.

dojonoodle Sun 15-Sep-13 20:52:45

She obviously can give details if she wants to. It was the fact that she did which stood out as no one else has.

I think that the great majority of people have that 'I'm alright jack' , attitude, whatasook, and would prefer to keep what they have rather than contribute part of it in tax, even if they haven't actually earned the money but have just happened to be in the right place at the right time.

I think the pensioners in 50 years time (who won't have benefited from massive rises in property and who may well have no state pension at all) will be much more deserving of sympathy than the OP's friend, relatively speaking.

SomethingOnce Sun 15-Sep-13 20:53:28

Or, it says 'our advantage allows us the flexibility to plan to avoid attempts to redistribute wealth through taxation' possibly with the implication that 'you can't take it off us, so don't waste your time trying'.

WhataSook Sun 15-Sep-13 21:03:42

I do agree dojo, we all need to pay our share, but it needs to be done fairly.

Quangle Sun 15-Sep-13 21:19:04

I gave some personal info, along with married. Unfortunately I don't have the options for jigging around which house I live in in order to avoid this tax - if it does start to impact on me. Depending on how it works, and I'm still not sure how the valuations would work, I would have to consider moving but that would be to a whole different borough, taking DCs out of school etc. It would be a bit of a nightmare - and we're not even in the top council tax band! I think I'm two from the top (can't remember) - which just goes to show what's happened to house prices since those valuations were done.

Anyway, I agree I'm rich because my house is worth a lot. Not money I can do anything with though - unless I make a significant geographical move which would be unsustainable given my job and the DCs' school. My income is ok but not enough to sustain a big new tax bill annually. I'm only really giving the info to give a sense that there are rough edges to this instrument - like the benefit tax. Makes sense from a distance but up close has some difficult implications for individuals who don't fit the bill of "mansion-owner". But again, not expecting anyone to send cash wink

Crowler Sun 15-Sep-13 21:19:57

Someone who owns a house worth 2M or more in London may or may not be wealthy. They're entitled to transparency into the tax implications of their house purchase.

snowlie Sun 15-Sep-13 21:20:48

But looking at it from another perspective, I'd be very concerned about my Mil, DPs if they had to move to pay this tax....ok so their houses don't come anywhere close, but it's not just about the money. Is the Gov making an option available to claim the tax from their estate after death - if so then things are not as dire. I'm not in favour of the wealthy, pensioners or not, paying their dues.
Life is comparative - dh works with people who have 3 houses abroad - no kidding, just serious wealth, we are comparatively poor but so well off in comparison to the rest of the country it's not funny....sometimes we need to remind ourselves and get a grip on reality.

snowlie Sun 15-Sep-13 21:21:46

I'm not in favour of the wealthy not paying their dues! <oops>

dojonoodle Sun 15-Sep-13 21:22:16

something- exactly- the rich have that advantage. Those sort of arguments are always used when governments (half heartedly) try to introduce schemes to tax the rich more (i.e. it won't work because the rich will find ways to avoid it).

whatasook- it is impossible to be truly fair to everyone but I'm certain that there is a lot of resentment up and down the country of the way that huge corporations and extremely rich individuals are able to legally dodge tax but those on average or lower salaries are forced to pay when they are already at a huge disadvantage. That isn't fair either.

I'm sure that if I knew the OP's neighbour, I would feel sympathetic towards him but, in reality, he has been v fortunate financially.

dojonoodle Sun 15-Sep-13 21:25:55

I missed your details quangle but I do agree that we all cut our cloth and a sudden change (illness, redundancy, sudden massive tax bill) will always be hard and require changes to be made.

Crowler Sun 15-Sep-13 21:28:53

I think Quangle's situation is a perfect summary for why the mansion tax is unfair.

SomethingOnce Sun 15-Sep-13 21:59:58

Life is comparative

To a point, yes. But when you get so poor that it's eat or heat, that it doesn't mean shit.

SomethingOnce Sun 15-Sep-13 22:00:27


morethanpotatoprints Sun 15-Sep-13 22:22:02

The Gov only want rich people to live in London. If you can't afford it you are out. It is conservative, make rich richer and poor poorer.
It has been their main purpose since they first formed.
Why are people still so surprised.

The benefit cap will also force a lot of people out of their homes in London and the South.

There are houses in the North that are worth 2 Million, not on the same scale, but the South doesn't seem to have the same unemployment and degeneration on the same scale.

Mumoftwoyoungkids Sun 15-Sep-13 22:32:28

Op - your "poor" pensioner friend could do Equity Release maybe. An insurance company will give him up to 60% of the value of his house.

When he dies / goes into residential care and the house is sold then they get their money back (plus interest).

So he could get up to £1.2m out which will not just pay his mansion tax but will enable him to stop having to worry about what he spends in the supermarket.

Havea0 Sun 15-Sep-13 22:33:37

I keep wondering how much the op thinks she or anyone needs to be rich, as she considers that 2 million doesnt do it.

Havea0 Sun 15-Sep-13 22:35:38

I am concerned about the poor pensioner too Mum, Especially since he was originally working class. Makes all the difference that hmm

eretrew Sun 15-Sep-13 22:36:54

A 2 million property anywhere in the country makes you affluent.

Havea0 Sun 15-Sep-13 22:37:21

Do you know what I am most concerned about? That there are so many people, like the op, who are so used to living in a bubble [and that inclused a lot of MPs] that they so utterly lose sight of reality.

ubik Sun 15-Sep-13 22:38:19

I couldn't give a fuck about people in £2M houses - if you don't like it, sell it.

Chocolatehunter Sun 15-Sep-13 23:17:48

It strikes me that there are some people with very expensive London homes are trying to pass their house off as ordinary. Try googling a place in the south wales valleys for what I see as ordinary, there's a place called maerdy which may be a good start. Try seeing if these houses are the same size, standard, design and location as yours, then consider the local amenities. Maerdy has a bus station but no train line (that got removed with the last of the coal mining era) it doesn't have a petrol station for miles but does have a working mans club (which is like a zoo on a Saturday night). Is this ordinary for you London types? No shops, no bars, no supermarkets, no petrol stations no nothing (and it's got a sizeable population so isn't seen as rural). In London the prices are much higher because you get a LOT more. You may be able to get yourself an 'ordinary' property in Maerdy for about 30k but I assure you that most London types would turn their noses up at it. So do I feel sorry for you having to pay your mansion, not a bit.

MollyHooper Sun 15-Sep-13 23:19:52

This poor guy is sitting on 2 million quid?

Sympathy? Fuck off.

Soz. sad

Havea0 Sun 15-Sep-13 23:26:38

Chocolate, to them it is ordinary.

Havea0 Sun 15-Sep-13 23:27:32

Or "comfortable" or "a three bed terraced house".

MollyHooper Sun 15-Sep-13 23:29:01


MollyHooper Sun 15-Sep-13 23:40:36

I was going to write tough luck but anyone who has 2 million pounds at their disposal is very lucky.

Sell your house and see your friend in the pub once a week, invite them to your new lovely home for tea and cake.

Don't make a shock face about the expectation of that, it's not a hardship. People are skipping meals to feed their children.

2 million? Again.

Fuck off.

coraltoes Sun 15-Sep-13 23:55:22

2bar terraced houses are only common in the most kerching parts of town - get real. Hampstead, Kensington, primrose hill, notting hill, Chelsea and Knightsbridge are not representative of London. Plenty of nice areas exist that are not so stupidly priced: hammersmith, islington, Camden, greenwich, blackheath where we all manage to plod along in our sensibly priced houses without worrying about mansion tax. Linking to an ex council house in nw3 or a marylebone pied a terre is disingenuous

peggyundercrackers Mon 16-Sep-13 00:01:46

only on MN can someone think because you own a £2m house your not rich - you are rich, obscenely rich in fact - you choose to live in a house that is worth that much money - no one forces you to live there.

sydlexic Mon 16-Sep-13 00:07:10

I can see no moral justification for this tax. The value of a persons home is irrelevant.

Many old people will have bought their houses for 2 or 3k and paid their mortgage off thirty years ago. They are struggling to make ends meet but their houses have gone up in value due to their location. You then tax them out of their home, which is sold to some one rich enough to pay the tax.

Lazyjaney Mon 16-Sep-13 06:35:18

I suspect a lot of people in London are still paying high mortgages on their houses, then the prices go up and suddenly they have a "mansion" and need to find as much again, while still paying the mortgage.

Maybe people should pay mansion taxes for square feet instead, as that is a better measure of where the truly wealthy live.

ubik Mon 16-Sep-13 06:36:04

If you are struggling in a £2M house, you sell the house.

ubik Mon 16-Sep-13 06:37:49

And £2M is still alot of money even in 'that London'

Crowler Mon 16-Sep-13 06:43:31

It's a bit silly to just say that someone should sell their house to raise the funds for a tax related to the house that they are told about AFTER THEY BUY THE HOUSE. So they have to pay a mansion tax, and then buy another house and pay another stamp duty?

Being the owner of a 2M house in London does not make you "obscenely rich".

I would like to know what war this pensioner lost his eye in. If he is 80 then he was born in 1933 and would have been 12 at the end of WW2.

So either this neighbour is a liar or the OP was deliberately exaggerating or implying things lying about his circumstace to get done sympathy for this frankly ludicrous situation.

Some sympathy. Damn phone.

Crowler Mon 16-Sep-13 07:29:02

There were lots of bombs going off in London when he was 12. I don't see how it's implausible that he lost an eye.

But that's neither here nor there.

BrokenSunglasses Mon 16-Sep-13 08:20:35

I don't agree that it's fair to pay a mansion tax in London because you get more in London than you you in the Welsh Valleys. That's what council tax is for, and although I have done no research on this whatsoever, I'd guess that council tax is much higher in London than it is in Wales. Also, the transport mentioned doesn't come free. If people want to use it they have to pay for it, and it's not cheap.

Change the council tax bands, or charge more stamp duty when buying a £2m property, but don't start charging it just because house prices have gone crazy.

Lots of people are asset rich and cash poor, and while I'm not saying that people should break out the violins in sympathy with those who have homes which have gone up massively in value, I do think that some posters need to be a bit more open minded.

Many people who are owners of expensive homes are no better off with their day to day spending than people who have secure social housing tenancies, except they have to pay for maintenance on their home instead of it being down to the council or HA.

People are still people, and I don't see why it's ok to post that you couldn't give a fuck about people who live in expensive homes without being jumped on any more than it's ok to post that you couldn't give a fuck about people who live in social housing.

Nancy66 Mon 16-Sep-13 08:34:30

coraltoes - plenty of 'ordinary' people live in the areas you mention too.

Areas like Hackney, Islington, Clapham, Hammersmith, Shepherd's Bush are also ridiculously expensive. There are terraced houses going for £1million in Peckham now.

ophelia275 Mon 16-Sep-13 08:50:00

I'm in favour of it or rather a wealth tax.

Most people who have million pound "mansions" paid peanuts for them years ago and they have appreciated in value through sheer luck, not through hard work. Meanwhile people earning peanuts doing long hours at work are being caught in the 40% tax band earlier and earlier. We should be taxing unearned income/wealth rather than taxing earned income as it just disincentivises hard work. This is also the reason why we have such a damaging property bubble, because people buy homes as speculative assets, keeping them empty and hoarding them pricing first time buyers and the younger generation out of home ownership and forcing them into either a life of renting from Rachman landlords who bought up loads of properties cheaply in the 80s and 90s or having to pay hundreds of thousands for a tiny flat.

It is about time the onus of taxation moved to unearned wealth and away from work. I am actually in favour of a land value tax but that is a whole other argument.

I just checked council tax rates for top-band properties in Kensington & Chelsea, in Manchester, and in the Vale of Glamorgan.
RBK&C £2153
Mcr. £2654
Barry. £2837
Wick. £2742

People in South Wales are paying considerably more council tax than those in Kensington and Chelsea.
I chose the most and least expensive rates from the vale of Glamorgan to show the range, but even Wick (the cheapest) is far above K&C.
I chose Manchester as a control group, a place that has good infrastructure and transport links but isn't London.
Assuming a fictional Kensington terrace squeaks over the £2M mark, it'd have to go over by £60k before the "mansion tax" made up for the difference in council tax, even between K&C and the cheapest VoG council.
Does that help?

Nancy66 Mon 16-Sep-13 08:54:52

Ophelia - do you not think that having to forfeit a home that you spent years doing up will also disincentivize hard work?

ophelia275 Mon 16-Sep-13 08:55:57

The whole tax system needs to be rethought. For example, giving tax breaks to buy to let property owners, I mean ffs why not give it to first time buyers rather than people who already have more than one property!

ophelia275 Mon 16-Sep-13 08:59:42

Nancy66, no I don't. I think telling the younger generation that they will not get free education but a life of debt, that they will not get generous pensions and that they will have to pay 10 x their salary to buy a small flat in a decent area of London or pay the mortgages of those who already own a home, whilst those that live in "mansions" are still entitled to free bus passes, winter fuel allowance, free tv licences, earlier pension ages disincentivises hard work.

mrsjay Mon 16-Sep-13 09:07:51

Being the owner of a 2M house in London does not make you "obscenely rich".

It sort of does two million pounds in property makes you rich I dont care if they bought it in the 1800s and it has been the family home for all that time a person is sitting on two million pounds,

cardamomginger Mon 16-Sep-13 09:16:36

The rich do pay into the system. Those who have bought a house now valued over the threshold will have paid income tax on the money they used to buy their property and will have paid stamp duty on the purchase. If they have done improvements that have augmented the value of their property, taking it above the threshold, they will have paid VAT on those improvements. And self employed builders who have worked on the project will have paid income tax on the earnings they made from the project. They have already paid tax on their property. Why should they, and they alone, have to pay an additional tax, for each year that they own this property?

To everyone who says 'just sell', this tax could well create unsaleable properties. Who is going to take on a £2 million house when they know they will have to foot a hefty bill each year of ownership? Those for whom this tax is truly irrelevant from a financial point of view, are more likely to be those buying at even higher prices. So you will have a band of properties, including those that are currently valued below the threshold, that are effectively unsaleable.

comingalongnicely Mon 16-Sep-13 09:20:18

I think some of the problem is that people think houses = money.

If you can sell your house and buy a comparable one in the same area for less, then yes - you have disposable income.

If however, you can sell your 3 bed semi in Clapham and only afford to buy a 3 bed semi in Clapham with the proceeds then you don't profit and thus don't have disposable income.

We bought our house for 80k, it's now worth 180k - I don't have twice as much money, we still have the same car, our lifestyle hasn't changed - it's monopoly money & doesn't bear any resemblance to real life.

Some people are saying "move away then" - why? If you start taxing the poor out of certain areas then you start to create "ghettos" where only the poor live. "Financial Cleansing" of desirable areas is not the way forwards surely?

Rather than taxing those who live in an area that has suddenly become "fashionable" why not make it illegal to give a mortgage for more than 3 x income? Tax the shite out of second homes that are let, tax the shite out of holiday homes. Until more people have 1 home, why should some people have 2? That makes more sense to me.

If no one can afford to buy a house at stupid prices because they're limited to 3 x their wage them maybe overall house prices will drop. Before people start crying about "negative equity" - that only applies if you sell your house. If more people lived in their houses instead of seeing them as "get rich quick" schemes things would be tidier all round.

There are bin men, cleaners & all sorts of public sector workers living in "mansions" in London - they're not rich, they just happened to be born there!!

MrsOakenshield Mon 16-Sep-13 09:21:40

on the one hand, there are a lot of older people who have benefitted from the huge rise in property values (along with other benefits such as family allowance for all, jobs for all, free university education, final salary pensions etc etc), and tbh my 'sympathy' is fast running out - hate to say it but pensioners are the biggest group in recipient of benefits and certainly a good number of the pensioners I know do not need all, if any, of those benefits (most are desperately justifying why they should hang on to them though!).

But, it is true to say that in certain parts of London 2 million is not buying you a mansion, it's buying you a 3 bed terrace. And yes, that pensioner could sell up to avoid paying this and increase his income anyway. But, almost certainly, he would have to move away from the area he may have lived in for years, and I do think that is sad (for any older person of any income) - I can imagine it being very disorientating for an older person to have to start again in a new, perhaps not such nice, area in their 70s or 80s. I also think that it is good if an older person can have a spare room, for children/grandchildren to stay in (which is why I think the bedroom tax isn't great either).

I don't know what the solution is for your neighbour but looking forward I guess the thing is to make your own plans while you can rather than being pushed into them by the tax man.

jacks365 Mon 16-Sep-13 10:11:57

People talking about how much tax the man will have paid from earning enough etc to afford a £2 million house are not taking previous levels of inflation into account. People are talking about house prices doubling in the last few years but my parents bought their property in the late 80's and it's now worth 6x the price they paid. They are not paying a mortgage on the increase nor stamp duty, because the property has increased their tax bill hasn't but everyone who isn't in their position ie trying to buy now is paying for the increase. Higher mortgages, higher stamp duty why should one person have to pay because house prices have increased but another person not? If that money was sat in savings and the increase was due to interest how much tax would then be paid?

With regards to selling and having to buy a comparable property why? My parents want to downsize, they don't want or need a big family home any more. They are fit and active now but appreciate they may not always be so want to buy an easier to manage property niw and get it how they want it while they can.

I assume the mansion tax will be similarly valued to the council tax so once set its set till a big upheaval and they are all reassesed. It wouldn't surprise me if they use the valuation for council tax but reasses those at the same time so most people would be affected by higher banding too. The government won't miss that trick.

comingalongnicely Mon 16-Sep-13 10:25:01

SugarSpunSisters -"I would like to know what war this pensioner lost his eye in. If he is 80 then he was born in 1933 and would have been 12 at the end of WW2."

We've had a few since that one you know, ironically one of them is known as the "Forgotten War". Just because &you don't know something, it doesn't automatically mean someone is lying...

Lizzylou Mon 16-Sep-13 10:28:05

Completely with MrsCB and Ophelia on this.
We have had a change of fortune recently and are purchasing a much larger property than we are in at the moment. We fully expect to move when the children are older and left the nest. To release capital and enjoy retirement. We are planning for it.
That is exactly what the current vendors are doing.

ihategeorgeosborne Mon 16-Sep-13 10:29:08

I think taxing property is the way forward. There are many low and middle earners who cannot escape income tax and there are many in this bracket who cannot afford to buy their own modest home and are stuck with renting. I think the government should go even further and tax people heavily who have a total property empire of 2 million. This might free up more properties for first time buyers.

Redpipe Mon 16-Sep-13 10:36:50

I wrote.....
The prices have really only gone absolutely crazy in the last 6 years. Some of these people were 80 years old then, not exactly the age to say "right have you seen the price of our property now, lets move." at say 86!!

So why did you write
"I would like to know what war this pensioner lost his eye in. If he is 80 then he was born in 1933 and would have been 12 at the end of WW2."

So either this neighbour is a liar or the OP was deliberately exaggerating or implying things lying about his circumstace to get done sympathy for this frankly ludicrous situation."

Perhaps you should properly read my posts before you jump on me. I neither said my neighbour or that he is 80.

VoiceOfRaisin Mon 16-Sep-13 10:43:15

Sorry, not read all the posts but I agree with the OP. High earners are already taxed 45% on their earnings to support others. Why, if they have saved in the form of a home rather than spending on cars and lavish lifestyles, should they be taxed again? And there is a 5% tax on selling the homes too, remember (ok, technically it is levied on the buyer but they buyer reflects that in only having 95% as much cash to spend on a house). It is also odd that if you see your house as your pension fund (we do) then why should that be taxed but your pension pot is not? A mansion tax is picking on an easy target group and appealing to the envy of those who have saved less.

WhataSook Mon 16-Sep-13 10:47:32

there is a lot of jealousy regarding people who have bought and those still renting. Especially those that bought before the bubble and 'made money'.

I think that BTL landlords should be taxed - if they've got spare cash to buy mulitple properties when a lot of people can't afford one then yes they should be taxed. Oh wait, then we'll get the 'accidental landlords' saying it was the 'true BTL landlords' pushing up prices leaving them in negative equity so they couldn't sell etc etc.

Crowler Mon 16-Sep-13 10:49:16

The idea of a wealth tax for a UK resident (domiciled) is insane. As mentioned, they are already taxed at 45%. If they're left with 55% of their income and they buy a house with it, you want to tax that as well?

The property market in London is distorted because of foreign buyers. It would be more sensible to tackle this.

ihategeorgeosborne Mon 16-Sep-13 10:51:41

I agree with everything Orphelia275 said.

Nancy66 Mon 16-Sep-13 11:05:45

BTL landlords are taxed. They will have paid stamp duty on the property upon purchase , they'll be taxed on the income from the rent and will pay capital gains if they sell for a profit.

BrokenSunglasses Mon 16-Sep-13 11:16:05

You can't go telling the truth about what landlords pay Nancy, how will MNers be able to hate them quite so much if they aren't able to believe that they can swim in all their unearned riches?! wink

BrokenSunglasses Mon 16-Sep-13 11:17:33

InMySpareTime, if that's correct then I'm shocked, and happy to stand corrected.

ophelia275 Mon 16-Sep-13 11:45:09

So pleased that Vince Cable is talking about land value tax and this seems to be slowly creeping into the political consciousness.

ophelia275 Mon 16-Sep-13 11:51:28

Crowler - no they are not. Income is taxed at 45% for the richest being paid by PAYE. It is very easy to be very wealthy without paying much tax at all. For example, anyone who bought a house years ago and seen it increase in value has a valuable asset which is not taxed and if it is their main home they will not pay capital gains when they sell it. That same person could have bought plenty of other properties as BTL investments through a Ltd Company, take dividends as profits which are only taxed at 10% below £32,010. Compare that to someone living in rented accommodation paying thousands per month for a tiny flat and still paying 40% on an income of £35k. Totally lopsided.

Crowler Mon 16-Sep-13 11:56:44

If they're taking income as a dividend, then the company has paid corporate tax on it. And as you know, the dividend tax rate increases quite a bit past 10%!

Nancy66 Mon 16-Sep-13 11:58:48

highest band of tax is 50 per cent isn't it?

Crowler Mon 16-Sep-13 11:59:54

It's gone down to 45.

Quangle Mon 16-Sep-13 12:01:27

agree with sparetime that the council tax bands are all over the place. I suspect that that would be a much easier and simpler and more politically acceptable fix to this problem - where I live the highest band is £320k and above. Let's say, to adjust for house price inflation, that's now £700k and above - so someone living in a perfectly ordinary flat or house anywhere within Central London (Wminster, Camden, Hammersmith and Fulham - normal people, normal places) is paying the same council tax as someone who lives in One Hyde Park in a £10m flat.

Quangle Mon 16-Sep-13 12:03:00

I think the highest band goes up to about 55 or 60% because at one point you lose your personal allowance so that pushes the marginal rate up above the headline rate.

VoiceOfRaisin Mon 16-Sep-13 12:03:48

Crowler spot on.

Being very very old I can remember the rent control days of the 1970's. The idea was to make housing more affordable. The reality was private LLs pulling out of the market and there being fewer homes available to rent. If you tax BTL LL's more, then a proportion of them will invest elsewhere instead and all you will have achieved is fewer properties available to rent and higher rents to keep up the BTL LL's rate of return (law of supply and demand).

I am not clear why BTL LL's are so demonised when they are providing flats/houses that people CHOOSE to rent (nobody is forced) thus providing them with a roof over their heads. Of course they take a profit otherwise why would they do it???

ophelia275 Mon 16-Sep-13 12:04:42

Corporation tax is 20% and it is very easy to reduce this as things like salaries are paid out as expenses and can be paid just below the threshold for paying tax. Then 10% dividend on anything after that. So still paying a lot less tax than someone paying via PAYE and that is how most BTL work (through companies to minimise their taxes) and they can write off mortgage interest so first time buyers have no chance when competing with BTL who have the odds stacked heavily in their favour (no surprise considering how many politicians are either landlords or have a vested interest in keeping rentiers happy).

Fleta Mon 16-Sep-13 12:10:06

VoiceofRaisin - I was told in no uncertain terms on here that I was unreasonable for evicting a tenant who owed me £7000 because "I still had everything and it was his home" - clearly he didn't value it that much as he was paying for £3k holidays rather than paying his rent......

OP - are you not a fan of mansion tax at all, or just in London?

ihategeorgeosborne Mon 16-Sep-13 12:15:32

Quangle, this also applies to a family earning between 50 and 60k, as they now face a marginal tax rate of 68% with 3 children. I'm not sure why a family in this situation, who can't afford to buy a home of their own should pay quite so much tax, when people living in very expensive houses who are not PAYE seem to be exempt.

Redpipe Mon 16-Sep-13 12:18:56


I am not a fan as I can't see how it can be implemented fairly across the country.

Tinlegs Mon 16-Sep-13 12:19:19

I have a problem with this because it is a tax on something you own, rather than something you are buying or selling. Council tax, I agree, is similar but that is really a localised tax to pay for services such as bins and libraries and it is based on the size of property / its value. There could be an argument for revising the top bands of Council Tax upwards to reflect the "super high" costs of the houses in some areas.

However, people taxed on their houses specifically will be being unfairly penalised for where they choose to keep their wealth. They could, instead, choose a Ferrari, or two £1million pound properties, or a lot of diamonds, none of which will be taxed.

People's circumstances do change. People live in huge, expensive houses they can't afford to heat. People are old and are left houses. Property is a very emotive issue. I am not sure how it will be possible to make this tax work and I am not sure it is fair on everyone. Already, inheritance tax hits people in that bracket, hard. I am in favour of charging when goods and services change hands (for example, VAT, or Stamp Duty) but I am not sure how you can justify taxing someone for continuing to own something, every year that they own it.

Crowler Mon 16-Sep-13 12:21:54

Ophelia: sure, corporate tax is reduced by business expenses - because that is not income (?) - so either they pay a salary, and that's PAYE, or they pay corporate tax (20%) and then income tax - not a flat 10% but actually 10%/32%/37%.

Like I've said, the problem is more likely the non-doms who are buying up property in London. These people are not subject to UK tax.

Redpipe Mon 16-Sep-13 12:40:23


I agree with everything you said.

There will be some people who own a real sizable mansion in one part of the country where the tax will be a minute percentage of their income and others (mainly south and London) where it could be anything up to all of their income and more. Thus meaning they have to sell their home and move area.

It's not right how ever much the posters say they have 2 million so who cares. angry

Turniptwirl Mon 16-Sep-13 12:41:41

You live in London for all the benefits associated with it. Aww shucks you gotta pay more for the privilege? Don't expect sympathy from people sick and tired of seeing all the investment going to London and SE

Redpipe Mon 16-Sep-13 12:46:10


This tax is based upon the premise that if you have an expensive home you are a high earner. This is simply not the case and it will penalise those who are not high earners and leave only the mega rich in many areas of London. If you support that it's up to you.

Chocolatehunter Mon 16-Sep-13 12:49:31

Redpipe the tax doesn't assume anything other than if you have an expensive house you have more responsibility to contribute than someone who lives in a very cheap house. I'm curious to know if you would you feel more comfortable about the mansion tax if it excluded pensioners?

ihategeorgeosborne Mon 16-Sep-13 12:50:19

It is equally unfair the other way round though Redpipe. What about people who are classed as high earners, i.e. just in higher rate tax band. They lose child benefit and pay higher rate tax. Many in this situation cannot afford to buy a home of their own. This isn't right either.

Nancy66 Mon 16-Sep-13 12:51:42

Just makes a lot more sense to me to impose a higher tax and on very high earners. At least you know they have the money rolling in.

Crowler Mon 16-Sep-13 12:51:50

Chocolatehunter, they've already contributed - a house is after-tax income.

Owllady Mon 16-Sep-13 13:04:07

I live 40 mins from central london by train in a naice area with naice schools and 400k would buy you a naice family home (and I despair because we cannot afford that on skilled local wages <roll eyes> sad grin <plays tiny violin>)
of course a 2mill house is rich when compared to the rest of the UK, even to alot of us in the home counties darling

Owllady Mon 16-Sep-13 13:06:52

I thought people who lived in housing association houses were being taxed on bedrooms? surely that is far worse, being taxed on a house you don't own, on a room you may need but not need all the time confused when you are poor anyway

Nancy66 Mon 16-Sep-13 13:12:07

Not everyone in social housing is poor. Just as not everyone in private housing is rich.

Chocolatehunter Mon 16-Sep-13 13:12:38

Crowler, i have also contributed though. I live in a very poor area and have to pay a much higher proportion of my wages in council tax than someone living in London as our rates are not only proportionally, but actually higher.

My income tax is also spent on things like the train network and the tube when public transport where i live is non existent, (a bus to Cardiff is once an hour from my local station). Furthermore I have to have a car because of said public transport so also pay all those related costs, tax, insurance etc. Driving is London is not essential so Londoners aren't forced to pay those costs. I also pay a stamp duty, which because I live in Wales is sent up to the UK gov to spend on what they favour (which is always London and the SE). I'm sure many other people from other parts of the UK feel the same so we don't have the same sympathy towards a person who's house price has increased so dramatically that it puts him in the same league as high earners.

Redpipe Mon 16-Sep-13 13:13:18


I think it's unfair for lots of people but I think it's easier to move and re start a life in a new area when you are younger or even when you first retire but this mansion tax could adversely affect older people (80+) who have lived in their houses for years and years. Some born in them.

The ones I know think the price of their home is ridiculous (those who even know) and they don't see it a real money. They are right because it's not real money unless you want to move miles away. The price of their house has no bearing on how they live day to day. I only know of one older person who has released the equity and moved far away. The reason the others haven't is because the local community and friends are too important to them at this stage of life, they have worked have a small pension and like their life just the way it is. I know one elderly resident who has never been out of their borough, and to move somewhere cheaper would mean a move much further away, probably out of London.

To make assumptions of someones wealth based upon the value of their property is mad.

To the posters that say they could pay the tax by drawing down against the property, what happens if they do this for years and then prices fall before they sell? They would have paid a tax for something which was never realised.

I understand that it's not the worst thing in the world but I think some people can't see passed the £ signs.

I did expect some of the replies though because many people seem to think if the streets of London are paved with gold hmm

ubik Mon 16-Sep-13 13:14:07

Indeed Owlady - in Glasgow there are families clamouring to move into smaller houses but unable to because they are already in arrears because of the bedroom tax - housing assoc says it won't rehouse. What can they do?

ubik Mon 16-Sep-13 13:16:51

I think perhaps the south east doesn't quite realise how tough it is fir the rest of Britain. Lots of things are not fair in austerity Britain, paying extra tax on your £2M house is really not the worst of it.

Chocolatehunter Mon 16-Sep-13 13:17:09

Redipe, would you be more in favour of a mansion tax if it excluded pensioners?

Crowler Mon 16-Sep-13 13:17:56

Chocolatehunter, why don't you move to London then?

Owllady Mon 16-Sep-13 13:18:48

I don't know any rich people who live in social housing, well apart from the queen and those that live in national trust properties owned by the council

I don't think people who privately own houses are rich either, but a couple of million? really, that is not well off/rich by most peoples standards?

most people sit and watch location, location, location and escape to the country like this shock hmm because the amount of money people have to spend on property is alien to them. it's not making assumptions about people, it's a factual comparison to someone else's life surely...unless they are one of those couples that never buy the house, a house anyway. there are always lots of them. Are they bullshitters? i don't know. Am i going off ona tangent? most probably

Redpipe Mon 16-Sep-13 13:19:33

No I just don't think mansion tax in it's current form works. I think they should properly clamp down on corporation tax before they start on bedroom tax, mansion tax etc.

VoiceOfRaisin Mon 16-Sep-13 13:22:30

owllady no, nobody is being asked to pay tax on spare rooms. Some people are having their subsidy taken away for extra bedrooms to encourage them to downsize and give space to those with larger families who need that housing and can't afford it without subsidy.

The taxpayer NOT subsidising someone for a benefit they don't need is not analogous to charging someone for something they have bought out of their own money for no particular reason other than you can.

Why not be like Cyprus and take 5% off everyone's savings accounts? It's the same thing and maybe not quite as unfair as at least those people have the cash to pay. (No, I don't really want that either - just making the point that both ideas are driven by envy and by the ease of any govt to collect such a tax)

Lemonandrose Mon 16-Sep-13 13:22:35

I can just about see your point op, but it's just one of those things. Everyone is suffering. If you have a big house you have bigger expenses. Unfortunately life is getting harder for everyone. Why should the higher rate earners be exempt?

I am also a higher rate tax payer, if that makes any difference. I chose not to live in London so I could afford a lovely home without paying 2 million for one - I can't afford a 2 mil house for the record.

Chocolatehunter Mon 16-Sep-13 13:23:15

Crowler why don't more people who live in London move out? Spread the wealth a bit. They could buy a cheap house in my area, do it up amazing and spend the rest of their money in our local economy instead.

VoiceOfRaisin Mon 16-Sep-13 13:24:34

owllady Bob Crow?

Nancy66 Mon 16-Sep-13 13:25:42

Chocolate it's true that council tax is very low in some London boroughs. However,averagely, the cost of living is about 25% more for a person living in the capital than anywhere else in the UK.

Londoners pay more for their: clothes, food, eating out, entertainment, transport, child care and just about any service you can think of.

Owllady. I know well-off people in social housing but, equally, I think it would be silly to deny that a person living in a privately owned £2million plus house is not in a position of great privilege.

however, as taxes go, this proposal is kneejerk. It's a panic, retrospective tax that's not fair and won't even bring in that much money.

Crowler Mon 16-Sep-13 13:26:52

Chocolatehunter, I haven't been listing off all the reasons that you have such a geographical advantage over me. If I had, then you would have a point.

I agree with Voiceofraisin. Why not just take 5% off of everyone's bank account who fits your criteria of a wealthy person?

Owllady Mon 16-Sep-13 13:30:24

Bob Crow lives in a council house?
or am I Bob Crow? (i am not for the record confused) grin

The bedroom tax has affected those with joint/part custody of children though and those who are disabled and need an extra therapy type room (or need to sleep separately) and that isn't fair. It's not just to do with 'taxpayers money' a lot of people who live in social housing, work and they are taxpayers too.

I really think the taxpayer argument has gone too far. I get it quoted at me with reference to disability services being cut at a local authority level (my dd is disabled) The local authority seems to have forgotten that these people and their carers and families are (or could be) taxpayers!

Chocolatehunter Mon 16-Sep-13 13:33:23

Nancy, clothes in the high street cost the same wherever you go. Your transport is actually cheaper and more frequent and reliable in London (i work in London sometimes and am always amazed by how cheap transport is compared to home). Your council tax is cheaper and I couldn't comment on childcare because i have never used childcare services in London. However our children in the Welsh valleys start school at 3 to allow parents more opportunities to work which is a huge benefit (not so much for those who cant find work though. Food also is the same in the SE but you have a wider selection which can distort things. Petrol is also much cheaper. London isn't actually a more expensive place to live day to day except for the cost of housing.

ihategeorgeosborne Mon 16-Sep-13 13:36:29

How is taxing people's savings fair? Jesus, I've been trying to save for a deposit to buy a house for the last seven years. If you take 5% of my house deposit savings, I'm buggered. The fact is that house prices are predicted to rise 5% this year alone and 20% over the next five years. This is unearned wealth and should be taxed in my opinion. Perhaps it would take the heat out of rising house prices too. I don't understand why property wealth seems to be such a sacred cow, when taxing hard earned, productive income and savings is fair game.

Chocolatehunter Mon 16-Sep-13 13:37:15

Crowler the post is about whether a mansion tax disproportionately affects people in London. It does. However people in London are disproportionately benefitted by a whole range of advantages over the rest of the UK so it seems fair that only those living in the very expensive homes should pay a tax.

Crowler Mon 16-Sep-13 13:38:44

Why don't you invest your savings in a property investment portfolio then? If it's such an easy way to make money?

Vickibee Mon 16-Sep-13 13:40:00

Perhaps it would be better to review couoncil tax banding and put a couple of higher bands for more expensive properties? This would not be a mansion tax but an extension of council tax. People with few liquid assets could continue to claim council tax benefit?

Crowler Mon 16-Sep-13 13:41:37

Also, I hate georgeosborne, I said why not just take 5% of the bank accounts of the wealthy. Do you object to that?

Owllady Mon 16-Sep-13 13:41:37

well that sounds more sensible vickibee

ophelia275 Mon 16-Sep-13 13:43:03

I find it funny that people want all the advantages of unearned wealth and price increases but get all angry when it is suggested that some of that unearned wealth be taxed so that those who are actually in work earning peanuts can pay less.

If you have made a huge profit by luck (i.e. huge house price increases) then you have not earned that money, the only labour attached to it is the original price you have paid. Why should someone earning significantly less in an actual job have to pay more tax so that you can benefit from doing nothing.

ihategeorgeosborne Mon 16-Sep-13 13:43:25

Crowler, I cannot afford to buy one house to live in, let alone a property portfolio. I'm glad to hear Vince Cable talking about a land value tax. He's about the only libdem with his head screwed on in my opinion.

Crowler Mon 16-Sep-13 13:44:29

Ophelia, do you view all investment income as luck?

Crowler Mon 16-Sep-13 13:45:12

ihategeorgeosborne, you could certainly find a fund that invests in property and put your money in it. I'm not suggesting you buy a building.

ihategeorgeosborne Mon 16-Sep-13 13:47:01

Anyone fortunate enough to live in a £2 million house is wealthy, wealthy, wealthy in my opinion. How could anyone argue that they're not.

Nancy66 Mon 16-Sep-13 13:49:34

chocolate - the figures re London living come from the ONS.

ophelia275 Mon 16-Sep-13 13:52:28

Crowler, the difference is that other investment income is subject to tax such as savings tax and capital gains on shares. There is currently no tax on peoples main homes when they sell it.

ihategeorgeosborne Mon 16-Sep-13 13:54:31

Sorry Crowler, I didn't answer your question. You asked if I objected to taking 5% from savings accounts of the wealthy. That depends on how you define wealthy. I find most governments seem to say higher rate tax payers are wealthy, i.e. those earning 40k a year. They seem to get clobbered every time. It's about time we moved away from this and taxed property instead. As I've said previously, there are many higher rate tax payers who cannot afford to buy one home to live in.

morethanpotatoprints Mon 16-Sep-13 13:54:55

If your house is worth 2m you should be paying tons of tax, because you are rich.
Most people can't afford to live in London so they don't.
If you choose to live and work there it is going to cost a fortune.
Maybe companies will struggle to find a workforce and move further North, creating jobs in areas of deprivation/less lucrative. I think that would be fairer.

SirRaymondClench Mon 16-Sep-13 14:05:26

If your house is £2mil chances are you have paid tons of tax, probably far more than if your house is worth £200k!
If someone is rich, and we have seem many examples on this detailing how you could end up with a £2mil house without being Rockerfella, that surely that is their business and no-one elses.
To get to that stage through hard work or whatever you will have paid a fortune in taxes along the way.
There really are some green eyed entitled monsters around.

Crowler Mon 16-Sep-13 14:08:58

SirRaymond, good luck. I've been mentioning that houses are an after-tax purchase for some time now, but some people have taken a view that it's all dividend income taxed at 10% or possibly not at all.

Redpipe Mon 16-Sep-13 14:10:16

But there is a tax when they buy. Presumably when you sell your main home you also buy and stamp duty is proportionate to the increased value.
Also there will be tax to pay if the home is inherited after death. So yes tax is applied to property

SirRaymondClench Mon 16-Sep-13 14:13:06

Crowler I have absolutely agreed with your posts, and also those of Raisins

Redpipe Mon 16-Sep-13 14:13:42


Have you ever thought that those earning a 40K a year that get clobbered every time may also have had a property in London that is fast getting to mansion tax levels.

ihategeorgeosborne Mon 16-Sep-13 14:15:08

SirRaymond and Crowler, You don't want the government to tax unearned wealth. I don't think it's right that the government should tax earned wealth. What do you think they should tax just as a matter of interest. Who do you think should pay?

Taz1212 Mon 16-Sep-13 14:15:53

I'm completely against it. If you bought your house at a much lower price and it has appreciated over the years it's just a paper gain and I don't think gains should be taxed until they are realised no matter what your wealth. If you bought at the £2m+ price I'd also argue with Crowler & Sir Raymond that it's highly likely you've paid substantial tax along the way.

Where I was raised you do pay capital gains on your primary residence. You can deduct inflation and certain expenses. I'm not all that keen on that tax either but do think it would be fairer than taxing what will be in most cases, paper gains.

Redpipe Mon 16-Sep-13 14:16:05

why do some posters presume that people in London a) moved there rather than were born there b) are high earners because they live in a house that very recently has massively gone up in value c) think London's transport system is cheap shock

ihategeorgeosborne Mon 16-Sep-13 14:16:56

There may be some Redpipe, but the most of the people I know on or around 40k have bought ex-local authority homes that need a lot of work or they rent where I live. We've been priced out see.

Crowler Mon 16-Sep-13 14:19:10

ihategeorgeosborne: I don't think the government should be taxing wealth at all.

You still haven't answered my question. Why don't you take your house fund and put it into a property market index fund?

Redpipe Mon 16-Sep-13 14:21:42

ihategeorgeosborne and Chocloate

Can I asked what you think about the potential for someone who
bought years ago and didn't pay much for the property, property increases in value and they get lumbered with paying mansion tax every year, then before they come to sell the market collapses and they don't ever realise the valuation?

The valuation of a property is never real money until it's sold or bought.

ihategeorgeosborne Mon 16-Sep-13 14:25:42

Never thought to Crowler. I don't know anything about it.

ihategeorgeosborne Mon 16-Sep-13 14:28:35

I can't see the market collapsing though Red. This where the problem is really. Houses are over-priced. The government wants them to stay that way, hence help to buy, help to sell, etc. People who bought years ago are laughing all the way to the bank. Property prices are not collapsing and will not. That is the problem.

LibraryBook Mon 16-Sep-13 14:31:10

The mansion tax is a ridiculous idea. I won't be voting for any party that adopts it as one of its policies.

I support a land tax.

Redpipe Mon 16-Sep-13 14:31:36

But who knows ihategeorge, even if property carries on increasing in the near future it will only put more people into the paper money bracket of mansion tax and then it could take a massive dive. It's happen a lot of times in London in the recent past.

Nancy66 Mon 16-Sep-13 14:32:41

how will a land tax work?

Redpipe Mon 16-Sep-13 14:34:58

No not all people who bought years ago are laughing all the way to the bank. Many people are still living in the same house in the same area and the bank or the people have not seen a penny of the increased value.

Life is not as simple as to make money on your main home and be rich because either you sell and move to another home which will be equally as expensive plus huge stamp duties. Many people can't move away from the area they are in for all sorts of reasons and therefore never really realise the equity.

onlytheonce Mon 16-Sep-13 14:38:01

I'm finding it hard to feel sorry for some hypothetical hard up pensioner sitting in a £2m house. I also find it hard to feel sorry for someone who has bought a £2m house that they are going to suffer as they are being taxed such a lot anyway. (Having that sort of income I'm pretty sure they will be able to afford advisors who will help them cheat the system reduce their tax liabilities).

In any tax system there are some who come worse off rather than others. You can create hypothetical absurdities to make your point as much as you want, but bottom line is if you have a £2m house you are very well off, either in cash or equity.

Dahlen Mon 16-Sep-13 14:39:32

Absolutely bonkers.

This is a country in which the national average wage is £26,000 - although that's artificially inflated by the 1% of mega earners. Perhaps it's more meaningful to say that 75% of people earn less than £35,000 per year.

How on earth have we reached a stage where it is considered normal or 'not rich' to be in possession of a property worth more than £2,000,000?

Owllady Mon 16-Sep-13 14:41:18

I know dahlen, I agree

ihategeorgeosborne Mon 16-Sep-13 14:41:21

The thing is though Red, there are many people who rent and their rent increases every year. They cannot afford to buy in many cases. There income is taxed to the hilt. The cost of living is astronomical. It is therefore no longer reasonable to expect this group pf people to pay loads of tax. People who bought years ago may only have paper gains, but the bottom line is, they have no or a very low mortgage. Their outgoings are much smaller than the renter who has yearly increases. Someone has to pay tax. I think people with multiple houses would be a good place to start. Home owners will soon be in the minority if prices keep on increasing the way they are and I guess at that point the pendulum will swing.

Redpipe Mon 16-Sep-13 14:43:45

I agree ihategeorge but two wrongs don't make a right. As I said before they should start with a hard line on corporation tax.

Crowler Mon 16-Sep-13 14:52:45

I agree ^^

This is a really silly "soak the rich" tax which doesn't stand up to any kind of scrutiny. Tax income, do it once, do it right.

MusieB Mon 16-Sep-13 16:02:12

Perhaps something else worth remembering in this context: London and the South East (where the vast majority of £2m properties lie) are huge net contributors to the UK public finances (in terms of tax collected less public expenditure). Each of London and the South East contribute some £15bn more to the nation's annual finances than is spent on them. The only other region which is a net contributor is the Eastern one (at about £5bn pa). All other areas are net winners (Wales is one of the biggest, receiving £9bn pa more than it contributes).

London and the South East are the economic powerhouses of the UK. They are already paying a huge proportion of the expenditure on the rest of the country, and a mansion tax would only make this imbalance worse.

Maybe London and the South East should declare UDI and leave the rest of you to get on with it without us?!!

onlytheonce Mon 16-Sep-13 16:16:51

Fine. Please give us the bailout money back when you piss off. Or maybe you should acknowledge that London and the SE don’t exist in a vacuum. And whatever supposed net contribution is actually reliant on the rest of the country for education, water, power etc.

The rest of the UK could recoup the lost London tax money by selling our water at extortionate cost.
I hope as web-based business becomes more prevalent, more of London's current jobs can be done remotely, by people living around the country. Then hopefully housing prices will even out at least a bit.

Redpipe Mon 16-Sep-13 16:27:14

London has its own water it's called the Thames.

Dahlen Mon 16-Sep-13 16:29:44

Even in London and the South East though the average wage is way, way below what would be required to get a mortgage on a £2m property. That this area contributes so much to the public purse is because a very small minority of people earn astronomical amounts of money.

If London and the SE were to be cut off from the rest of the country so they could "take advantage" of their higher contribution, all that would happen is that it would become a microcosm of the situation in the UK currently. Unless you reduced again and again until eventually you're left with a situation where the City becomes a state in its own right. Then it would have to import subsistence goods and power, and less-high earners to carry out mundane work, but there would be no room for these, so it would need to expand to include shops and houses...

London uses far more water than the Thames can supply. Even with the fact the water is reused several times.

BrokenSunglasses Mon 16-Sep-13 16:31:52

Anyone fortunate enough to live in a £2 million house is wealthy, wealthy, wealthy in my opinion. How could anyone argue that they're not.

I can quite easily argue that they might not be. Of course some people living in property valued at £2m will be wealthy, but if they are it is likely that they already pay a lot of tax.

But there will be people who's property's are fairly modest, they have just massive increased in value since they were bought.

In the same way that someone can live in a council property worth £400k and not have a huge income, someone can live in a property worth £2m and not have a huge income.

It doesn't become real money until the property is sold, and even then it's not worth much because its not going to buy you anything better than you already had. The value of everyone else's property has gone up at the same time. The only way to turn any of that £2m into money that can actually be spent on tax is to sell and move to a cheaper area or smaller property. People really should not have to do that for the sake of paying a tax on living in your own home.

onlytheonce Mon 16-Sep-13 16:40:21

It doesn't become real money until the property is sold, and even then it's not worth much because its not going to buy you anything better than you already had. The value of everyone else's property has gone up at the same time. The only way to turn any of that £2m into money that can actually be spent on tax is to sell and move to a cheaper area or smaller property. People really should not have to do that for the sake of paying a tax on living in your own home.

Why not? It's part of their 'value' as much as my earnings are part of mine. If people can't afford to live in their house they have to move. The main issue with this is that it is a new tax, and so people won't have been able to plan for it. But taxes changing are hardly a new thing, and are pretty much always controversial.

Redpipe Mon 16-Sep-13 16:45:01

If people can't afford to live in their house they have to move.

So effectively you are saying that only the unbelievably wealthy can stay? Interesting because I suspect if we were talking about poor people having to move out (as has just happened) you would not support the argument.

Redpipe Mon 16-Sep-13 16:45:37

last post was for onlytheonce

Mumoftwoyoungkids Mon 16-Sep-13 16:46:38

Or (if you are over the age of 50ish) you can do equity release.

If the value falls below the value of the Equity released then the insurance company loses out.

If you are under 50 then you are probably young enough to flog your house, move 2 miles down the road and buy one for half the price.

Either way - the owner will suddenly be much better off.

MusieB Mon 16-Sep-13 16:47:16

In the hypothetcial scanario where London and the South East declare UDI, I guess we would have to install desalination plants and take some of our water from the sea. Like they do in, say, Dubai.

And onlytheonce what makes you think that London and the South East should bear the whole brunt of "the bailout money"? The biggest recipients of government assistance were RBS (run from Edinburgh), Lloyds (OK, run from London), Northern Rock (run from Newcastle) and Bradford & Bingley (run from Bingley)....

Redpipe Mon 16-Sep-13 16:47:38


It could also push up the price of smaller cheaper housing as all those affected scramble to buy something well under the threshold.

BrokenSunglasses Mon 16-Sep-13 16:49:23

It's part of their 'value' as much as my earnings are part of mine

If you really can't see the difference between a figure on paper and cash in your bank account, then I doubt I'll be able to help you.

Redpipe Mon 16-Sep-13 16:50:24


If you are under 50 then you are probably young enough to flog your house, move 2 miles down the road and buy one for half the price.

You seem to have no idea, you can't buy 2 miles down the road for half the price.....FFS!!

And you know that equity release involves servicing debt right?

Dahlen Mon 16-Sep-13 16:52:50

Whatever the rights or wrongs of this, I think it's fair to say that housing prices in the UK generally, but in the SE particularly, are just completely out of sync with average incomes.

Redpipe - I don't think you can use that argument about forced relocation. In effect, the mansion tax could be argued to be equalising the playing field after the introduction of the bedroom tax on social housing. While the difference is that the home owners aren't being subsidised by public funds, they are also in a uniquely privileged position of sitting on a huge asset - and assets are something the taxman has always wanted a cut of. Saying "but I earned it" isn't a defence against income tax, so logically it can't be one against this either.

FWIW, from an empathy POV, I don't want anyone to have to leave a home they have lived in for 40+ years just because they can no longer afford it due to a tax. But the world doesn't work like that.

Redpipe Mon 16-Sep-13 16:55:47


The thing is though that the bedroom tax has not been applied to pensioners so effectively pensioners who have social houses are guaranteed not to have upheaval but a private owner could. Please correct me if I'm wrong but I think pensioners are exempt from bedroom tax on social housing?

Redpipe Mon 16-Sep-13 16:58:14

In addition to the mansion tax the taxman will get another huge cut when the pensioner dies and the estate is handed over to family.

Dahlen Mon 16-Sep-13 16:58:52

No you're right I think. That's a fair point, but again it comes down to sitting on a massive asset. Pensioners moved as a result of the bedroom tax would have to go where they're placed, possibly with no community support (if they're moved away from family and friends), and no capital to ameliorate that. Someone selling a £2.5m property and moving out a zone or two would be in a position where they could still purchase outright, in a zone of their choice (limited by price, but still given a choice), and have plenty of money leftover to finance travelling, care, etc.

Crowler Mon 16-Sep-13 16:59:57

Saying "but I earned it" isn't a defence against income tax, so logically it can't be one against this either.

You're comparing income tax to a wealth tax.

Dahlen Mon 16-Sep-13 17:02:12

Yes I am. I don't see a problem with that. The point is that the government has always wanted its take of people's money - whether earned, accrued or inherited - and will take it regardless of whether people feel it's unfair (unless they think it will alienate enough of the electorate to lose an election).

Crowler Mon 16-Sep-13 17:02:14

I'm shaking my head at the comparison between a reduction in taxpayer-funded benefits to a real tax on an asset you've bought with after-tax money. I'm at a loss for words.

onlytheonce Mon 16-Sep-13 17:03:28


If someone is in a £2m house they are very wealthy, in equity if not cash. If they don't have the cash to pay the tax then it might be a bit sad for them but I'm afraid that's the extent of my sympathy. I don't see living in the same house as some sort of inalienable human right.

cardamomginger Mon 16-Sep-13 17:04:11

Said this a few pages back, but I'll say it again. The mansion tax will probably mean that properties valued around the threshold (including under the threshold) will become impossible to sell. Who is going to want to take on a property when they will be taxed annually for every year that they own it? People, including those who simply cannot afford to pay out these sums every year, will be stuck with properties they cannot sell.

Those for whom these annual sums are genuinely financially irrelevant are likely to be buying at significantly higher prices.

'Just sell'. 'Buy something cheaper'. Who are they going to sell these houses to?

Owllady Mon 16-Sep-13 17:04:32

I am agog that people think those of us in the SE on SE wages can afford 2 million houses, absolutely agog. There are a small minority of people on this thread who are living on another planet, quite frankly. Honestly, have you heard yourselves? I do realise it's quite normal to move in circles with those of you of similar wealth, but surely you notice other people around you? you travel up the road to visit X town and see different movements in society?
or do you really just sit in your house, do your well paid job (and it must be well paid because my dh earns a very good salary and as I said before we cannot afford the 400k house in a naice area) mix with your friends of similar wealth and feel hard done to? sad because really you aren't, you aren't hard done to at all. having a house worth 2 million (assuming you don't have a 2 million mortgage - who does? I have never met anyone with one..) means you have a lot more choice than the vast majority of people in the UK

Dahlen Mon 16-Sep-13 17:05:22


Either we're discussing this purely from an economic POV, in which case poor pensioners who are asset rich but cash poor is not an argument because it is an emotional one. Point is that a £2m asset is a sizeable asset.

Or we're talking about it in terms of people being forced to move because of the nasty greedy government.

Owllady Mon 16-Sep-13 17:06:06

It has been well documented as to what section are pushing the house prices up in London cardamomginger
whether that's right or wrong is another discussion, but I know my friend who has sold and is buying in London was treated with utter contempt by estate agents as she couldn't or wouldn't be drawn into bidding wars

Dahlen Mon 16-Sep-13 17:06:11

That was to Cowler BTW

onlytheonce Mon 16-Sep-13 17:06:58

If you really can't see the difference between a figure on paper and cash in your bank account, then I doubt I'll be able to help you.

I don't recall asking for any help. I can't see a problem with being taxed on worth rather than cash.

Crowler Mon 16-Sep-13 17:12:35

Owllady, I'm not wealthy, I merely oppose the mansion tax.

Owllady Mon 16-Sep-13 17:13:54

I just think house prices are out of control anyway. I think none of these discussions would be taking place at all if local housing was priced at a level for locals wages and second home ownership was taxed at a much higher rate (or something, but second home ownership causes loads of problems as well)

Redpipe Mon 16-Sep-13 17:15:00

The thing is, all the 80+ people I know locally would be totally lost and away from their support system and often just too old to move. I think if someone is in their twilight years and their monthly income is not massive they should not be forced to move in order to pay a tax they cannot afford otherwise. It does not mean I do not understand the plight of many in the country or that I don't understand how on earth young people will ever buy a home of their own. Those things are terrible too.

I am stunned that so many posters here support such a tax with the possible implications for some people.

If the people I know are anything to go by, if they thought cash was so important they would have sold up and moved ages ago but they have chosen not to release any cash from their property because friendships etc. are of utmost importance to them. The fact people think it's ok for them to move because they be better off financial rather than emotionally shows to me how many posters think.

Lastly many posters would be up in arms on here if we were talking about people with less money. It's the attitude that it's ok for 'richer' people to be forced to move because they'll have cash to spend.

cardamomginger Mon 16-Sep-13 17:15:32

I'm not talking about what pushes up house prices. I'm talking about houses in a particular price band becoming much harder to sell. And that will have a knock-on effect lower down the housing food-chain as lower priced properties become more keenly sought after. If not bidding wars, it'll be other stuff - paying the other side's fees, including furnishing etc free, cash buyers only, etc.

I'm sorry your friend was treated so badly. Some estate agents are scum.

Redpipe Mon 16-Sep-13 17:17:01

"If someone is in a £2m house they are very wealthy, in equity if not cash. If they don't have the cash to pay the tax then it might be a bit sad for them but I'm afraid that's the extent of my sympathy. I don't see living in the same house as some sort of inalienable human right"

But it is a right for pensioners in social housing!!

Owllady Mon 16-Sep-13 17:18:27

Do none of you worry about what kinds of problems the house prices at this level are going to cause long term?
The country is struggling to pay for adult/elderly care already and that's with people (on middle/lower incomes esp) selling their homes to pay for care. We have a whole generation (at least) of skilled professionals unable or struggling to buy their own homes, let alone those on lower wages.

So full circle, what will happen confused It frightens me to death tbh

I know home ownership is not the be all and end all, but the reality for us renting privately is that our outgoings are high, so high we find it difficult to save (we get no family support <plays tiny violin again>) and sometimes our living conditions are poor because the house is old and our landlord is tight (he has a house worth well over 2 million though grin shock )

expatinscotland Mon 16-Sep-13 17:18:36

'But it is a right for pensioners in social housing!!'

They do not own the home.

Crowler Mon 16-Sep-13 17:19:18

I don't see living in the same house as some sort of inalienable human right.

Not human rights; property rights. When you buy something, it's yours.

expatinscotland Mon 16-Sep-13 17:20:26

'I am stunned that so many posters here support such a tax with the possible implications for some people'

I'm stunned that anyone considers owning a £2m asset as anything other than wealthy.

ophelia275 Mon 16-Sep-13 17:20:27

I think the point of Cable pushing the "mansion" tax (which incidentally seems to be popular with Labour as well) is to try and halt the London/SE house price bubble that is getting ever more crazy and was stopped from popping by using QE and low interest rates. He seems to be the only politician who can see that this bubble is not a good thing and will end up causing far worse problems than were seen after the 2008 crash.

Basing an economy on house prices is the height of insanity and it can only do untold damage to the economy and society as it sets so many negative precedents. High housing means that jobs need to be subsidised with housing benefits and tax credits because the cost of living (mainly housing) is so expensive in London/SE. Reducing housing costs would bring down the welfare bill for starters and might actually start to revert back to the sensible criteria of banks lending 3 x income so that houses can be homes rather than speculative assets for the older generation.

Redpipe Mon 16-Sep-13 17:21:25


Owllady Mon 16-Sep-13 17:23:03

My husbands Aunt is one of these people who hasn't been hit by the bedroom tax, she lives in a 2 bed house and has lived there since it was built in the 60s. It has had the bare minimum of work carried out on it and she is very infirm. She has been told by the council they have no-one after houses like hers anyway (it's a bit rough where she lives) and she regularly gets admitted to hospital because when left to her own devices she lives off beetroot sandwiches, like she is in the war/rationing period.

Why would anyone envy her having an extra bedroom? Most days she sleeps downstairs. the council have NOTHING they can rehome in her in, locally or otherwise.

expatinscotland Mon 16-Sep-13 17:25:57

Eh, what?

twistyfeet Mon 16-Sep-13 17:26:33

'The thing is, all the 80+ people I know locally would be totally lost and away from their support system and often just too old to move.'

This happens to poor pensioners all the time OP. My elderly mum was evicted by her landlord because he wanted his house back.
But its horrible when anyone has to move away from their support. Right now its happening to thousands of poor and disabled people, especially in London due to the 'bedroom tax'. It was only a matter of time before they started on everyone else. At least the pensioner in a 2 mill house has options which are not open to everyone else.
However, the vast majority of those affected by this proposed 'mansion tax' are not going to be 80 yo pensioners.

vixsatis Mon 16-Sep-13 17:27:16

I would have to pay this tax.

Zero inherited wealth. First generation at university. Same for my husband.

We both do city jobs (not the ones which caused the crisis) which we no not like very much because we wanted to be financially secure, not dependent on anyone else and to be able to cope alone and support our child even if something happened to the other. We also want to be able to pay school fees.

Both of us have a minimum 12 hour working day, often longer. Our personal lives are disrupted by travel and client demands. The pressure is huge and the people we have to deal with often very unpleasant. The upside is that we are, by most people's standards, very well off. The benefit of doing these ghastly jobs is not just for us: probably about fifty people in our organisations are directly dependent upon what we (as individuals) do to give them a job. At home we employ(on good terms) an au pair, a cleaner and a gardener. We do not claim child benefit, we do not use the state schools or (except by way of back up) the NHS. We both completely accept that we should also pay a fair share of tax. Neither of us had any objection to income tax at 50%. Neither of us has ever done anything to seek to minimise the tax we pay and, for people who actually work in this country it is pretty difficult to do so.

Our jobs bring into this country substantial amounts of money by way of payment for invisible export. Someone has to generate the income out of which the public sector is paid for.

In order to do the ghastly jobs but still have some family life we need to live near work. Our house is about 3,000 sqare feet: four beds, 2 bath, drawing room, sitting room, big kitchen/dining room plus bed/bath/sitting room for au pair and nice, good sized garden. This is not in a fashionable part of town but the house would almost certainly be assessed as worth about £2.3 million. It was paid for entirely out of income which had already been taxed at 40/45/50%; and if we were to die tomorrow, another 40% would go in tax. Out of the sum originally earned, there is not really much left, especially if an annual 1% is taken by way of "mansion tax".

All the time we are working, we can afford the tax, even though it is monstrously unfair; but we will not be able to do so when we retire. This house is our home and I had hoped never to have to move. I think we have done our bit for society one way or another and I do not think it much to ask that we keep our home. Before someone says that this is no different than someone who has to move because of the bedroom tax, that is nonsense: we have earned our house and paid for it. It has not been given to us by the state, paid for by someone else.

What irks me even more than the reality of having to pay this tax if introduced is its name: "mansion tax" is a disingenuous term designed to generate unthinking envy and hatred of one part of society by others- the house described above is hardly a "mansion". It is the equivalent of mindless benefit bashing. I used to vote liberal democrat on the basis that they were inclusive and meritocratic. Never again. I have wokred for my home, paid my taxes and deserve to keep it.

If starting again now, seeing that a miserable, wealth creating private sector job leaves one vilifed and not even entitled to stay in one's home when old, I might have chosen a more comfortable, interesting path, probably paid for out of someone else's taxes.

Apologies for the rant. I have been holding off all day.

ihategeorgeosborne Mon 16-Sep-13 17:30:39

Orphelia275, you are so on my wave length smile

Redpipe Mon 16-Sep-13 17:31:05


This happens to poor pensioners all the time OP.

I am interested you understand the plight of people who are poor and have to move but people who have an asset which has made them rich you do not.

Can you not see that you are biased against these people because they have money regardless of the fact it will cause them great emotional upset!

soul2000 Mon 16-Sep-13 17:31:18

This is the worst kind of tax. This tax is popular soley on the basis that 99.5% of the population will not pay it.

There is no reason other than a politician (CABLE) trying to make a name for himself. Calculating that he will have the support of people because guess what "We will not pay it".

Believe it or not,some people who live in valuable houses are asset rich income poor yes even in 2 million houses. Anyway i thought 7% stamp duty was a mansion tax. If when the owner of a 2 million pound house dies, there is anything left after 350/700k guess what, the state gets 40% IHT.

The other thing people need to be aware of is within 4 years other bands will be introduced. You can bet Mansion Tax will start at 1 Million.
A tax is not right because it does not effect you. Any money made from Mansion Tax would not even go to building houses for people.
The money that would be burnt on stupid vanity projects.

P.S People need to be aware its not just London and the South East effected by this political nonsense.

Redpipe Mon 16-Sep-13 17:35:06


I agree wholeheartedly with your rant wink

ihategeorgeosborne Mon 16-Sep-13 17:39:11

A property tax is coming in one form or another. The cost of living is becoming crucifying. Many people on decent salaries cannot afford to buy their own homes. People are not having wage increases in line with inflation, if at all. Rents are rising to ridiculous levels, due to BTL landlords over extending themselves and being greedy. We will have a lib/lab coalition in 2015 and they will bring in a property tax.

MajesticWhine Mon 16-Sep-13 17:39:28

cardamomginger makes a good point. Any kind of threshold (including stamp duty thresholds) distort the usual market forces which act on property prices. There will be huge demand for properties which have been valued under the threshold. This could result in them selling for a price above the threshold. Does that mean they would then be subject to the mansion tax, or would the original valuation stand (like with council tax)?

twistyfeet Mon 16-Sep-13 17:46:10

No, OP, I am sympathetic but feel the person could move a street or two. I'm sure they wont end up hundreds up miles away. 2 mill gives that option.

Although to be honest I'm not sure this will control house prices in London which I assume is the aim. The truly rich will just pay up or find avoidence methods and London will continue to be a bubble.

soul2000 Mon 16-Sep-13 17:48:48

Thats great then! We will be going back to "DENIS HEALEY" with "VINCE SQUEZE THE RICH UNTIL THE PIPS SQUEEK CABLE" .

These kind of policies will not make it better for the North/Midlands Wales. I leave out Scotland "GOOD RIDDANCE" you can become the SSR "THE SCOTTISH SOCIALIST REPUBLIC" if you want .
For the rest of the country taking money from the wealthy does not make the less wealthy better off . In effect the money just gets taken out of the Economy and wasted.

It does the country no good apart from making Jealous people feel good.

Redpipe Mon 16-Sep-13 17:51:54


"No, OP, I am sympathetic but feel the person could move a street or two. I'm sure they wont end up hundreds up miles away. 2 mill gives that option.

Why do you think houses prices would be any different a street or two away? I am genuinely confused?

Vixsatis the tax is 1% of the value over £2M so you'd only be taxed £3k per year in your case, it's not as bad as people are making out. If you can afford a number of staff, you can afford £3k.

twistyfeet Mon 16-Sep-13 17:55:03

Cos London streets vary so much. There must be a property for said 80 yo less than 2 mill within half a mile.

Redpipe Mon 16-Sep-13 17:57:58

Although to be honest I'm not sure this will control house prices in London which I assume is the aim. The truly rich will just pay up or find avoidence methods and London will continue to be a bubble.

Don't quote me on this but I think this is just a revenue strategy and vote winner. You are right though the truly rich will just pay up so as always this will hurt the people who can't pay the tax only and therefore the ones with less disposable income.

Vixastic has a very valid point though it will affect people like herself when retired. Only the super rich can afford a further tax to pay out of their pensions.

Owllady Mon 16-Sep-13 17:58:55

I am not jealous of anyone <sigh> I have no reason to feel jealous of anyone as material wealth doesn't interest me tbh. I wish I could afford my own home for security as I have a very severely disabled child, but luckily I have a landlord who is happy for me to stay in home, paid for by taxpayers aka my husband. It is not abnormal feeling to think things are unfair for people in other walks of life and to draw a perception of this proposal based on that.

As I said, I live in a naice area 40 mins from central london by train and a 2 million house rarely appears on the market. I am not in the Midlands or Wales or the North (oh I am north of watford) BUt even the houses here are not affordable to local people and they are a fraction of the price of what we are talking about.

Whether or not the proposal is fair or not (in your eyes or anyones elses) , I still take umbrage that having a 2 mill house is not wealthy or well off compared to the majority. It's just lacks total perspective to think it's not

Redpipe Mon 16-Sep-13 18:03:18


But you would be able to just go down 80K. If property prices keep rises as predicted you'd have to go down a fair amount to keep yourself out of the bracket.

Although with stamp duty at 7% and moving costs you'd relieve yourself of some cash just to get yourself out of paying mansion tax.

To answer your question no houses a few streets away would not be significantly less.

Nancy66 Mon 16-Sep-13 18:04:15

House prices in London and the south east are insane.

I bought in London in my 20s because I could easily afford a house and take on a mortgage that was around 3 x my salary. I was well paid at the time but not a ridiculously high earner.

Contrast that with now and anybody who wanted to buy my house (in SW London) today would need to be on a salary of around £350k

Redpipe Mon 16-Sep-13 18:05:41

I still take umbrage that having a 2 mill house is not wealthy or well off compared to the majority.

But some people are only wealthy enough to pay the tax if they sell their house. That's the point.

I think everyone is focussing on the fact that in comparison to most, owning a £2m property does make you rich, and of course it does....but it doesn't necessarily mean you have a spare £2k-£3k of cash to chuck at the taxman every month. Most people living in the £2m houses will, believe it or not, have stretched themselves to the limit to afford it - same as most house buyers do - you live to your means. They will have paid tax on their income which they then use to buy a house, which they also pay stamp duty on. To then be taxed again and again for having invested in an asset that grows is simply unfair in my mind...where do you stop with it, charge extra tax for people with expensive art collections, yachts, jewellery confused, who may happen to live in say, Yorkshire, in a £1.8m house?

Also think about the effect this will have on the market and London 'community'. What is already happening, due to stupidly high prices, driven by the Russians, Arabs etc, but also a big influx of wealthy French escaping punitive taxes at home, is that very few 'normal' people will be able to afford a family home and when they need one, they will leave London for a house, yet probably continue to work there, pushing prices further and further up, further and further out of London and leaving behind either the very rich, or those supported on 'middle class' family element at all, which won't benefit anyone.

Redpipe Mon 16-Sep-13 18:11:06


That is so true and so scary.

I feel so sad for the young trying to get on the housing ladder and this mansion tax will only serve to push more average income families out of London as well. Regardless of the price of their property there are plenty of families with medium sized incomes that will be pushed out leaving just the super rich to it.

Redpipe Mon 16-Sep-13 18:12:29


Crossed posts smile

Cutitup Mon 16-Sep-13 18:20:11

I know some people who restored a stately home from being a shabby, 14 apartment complex back to the glorious Abbey that it once was. It is a very grand house but they struggle to afford it.

They can't heat the house because it's too big and it's absolutely freezing in there. They hold many functions at the Abbey in order to be able to keep their running costs going. They also host events for the villagers as a lovely gesture.

They have said that if the mansion tax comes in, they will have to sell the Abbey. Probably to a foreigner.

It would be such a shame if a rich foreigner came in who would be unlikely to live there full time and it would just become another bauble to them instead of a valued village feature which is 'shared' by the villagers.

For this reason alone, I think the mansion tax is ridiculous. Don't forget how much tax these homeowners have had to pay just to get the property in the first place.

CHJR Mon 16-Sep-13 18:37:34

Er, um, without wishing to volunteer for my first MN flaming, may I point out some basic facts?

1)London does NOT disproportionately benefit from government investment; on the contrary, London and its satellites and commuter belt are supporting those of you in Wales, Scotland, etc, no matter how you slice it. Per capita: the government invests more per person living in Wales (or anyone outside the SE) than per person living in London. By area of the country: London and the southeast are the only regions of the UK that pay more to the gov't in tax than they receive back in investment. Of course, we do have better public transport, because there are a lot more of us to transport so it's cost-effective. [chocolatehunter], I would not disagree if you reason that the government should spend more in less densely-populated areas: where houses are further apart, the government must naturally spend more to run buses, collect rubbish, run pipes delivering water and so on. By the same token, PRIVATE services eg inter-city bus companies, Internet, petrol stations as someone mentioned above, shops tend to be more numerous in more densely-populated areas, not because companies discriminate against country living but because they EARN more per £ of investment in big centres like London.

2) The average cost of a home in London is 6 x that of one in southern Yorkshire & But average family income in London is only 1.5x the average income in Yorkshire You do want to eye those figures a bit dubiously, since the income stats are from 2007 and surely don’t include the unemployed, who are twice as numerous in Yorkshire And obviously even in London people earning the average are not usually in £2 M houses!

3) one reason parts of our central gov’t are so keen on the idea of the mansion tax is that the revenue would go to the central gov’t, unlike council tax which goes to your local gov’t to pay for local services. Is this what those of you complaining about the rich people in the centre want? Wouldn’t improved council tax banding make more sense? (The top band can be amazingly low: In our London borough, the council tax paid will be the same for anyone living in a place worth more than £320 K regardless of whether it’s a small flat, which is quite possible, or a £6 M mansion.)

3) There is no suggestion that mansion tax would replace council tax, btw; it means higher-value houses would be taxed twice. Again, you may feel this is justified.
... to be continued! sorry for length

twistyfeet Mon 16-Sep-13 18:37:48

'I feel so sad for the young trying to get on the housing ladder and this mansion tax will only serve to push more average income families out of London as well. Regardless of the price of their property there are plenty of families with medium sized incomes that will be pushed out leaving just the super rich to it.'

You are right there. But I wonder what will happen when they find there are no cleaners, shop workers, binmen, teachers, nurses etc etc? London house prices are insanely unsustaniable.

CHJR Mon 16-Sep-13 18:40:34

4) property owners do pay tax already on the massive gains in value their houses have been making -- when they SELL those houses, they pay capital gains tax. CGT is 28%; your income tax rate will be higher than CGT only on any earned income you have above your first £40K per year and so your average rate of total income tax will be higher only if you are earning well over £60K per year.

5) the proposed mansion tax is based on the value of your house (however they calculate that), not the equity you hold in your house. In other words, if you live in a £2 million house on which you have yet to pay a £1.8 million mortgage, you will be taxed on money you haven’t yet earned towards your mortgage. Granted, only higher incomes will get a mortgage of that size in the first place.

6) the whole idea of a mansion tax actually originated with us Londoners getting annoyed by all the foreigners and non-doms pushing up London property prices by sheltering their sometimes ill-gotten gains here and not paying any tax. Arguably then the main beneficiaries of the mansion tax could be London residents, if it punctures the property bubble. But possibly the rich foreigners, who are generally buying to let not to reside, will simply buy more smaller places, thereby pushing us locals out of those properties too.

Personally I’m very on the fence about the mansion tax, but I’m not on the fence about the fact that the media never mention any of these points in their comments on the subject. I'm even less on the fence about our dear politicians holding interest rates at levels guaranteed to cause a housing bubble and ensuring that no other form of investment, except for a brief interval gold futures, has kept place with inflation in the past half-decade in the UK -- a serious penalty for those of us trying to save to buy a home OR a pension!

Redpipe Mon 16-Sep-13 18:44:31

Very interesting and well backed up post, thank you.

IAmMiranda Mon 16-Sep-13 18:46:31

This is what £2,000,000 will buy you in Central London, which is arguably the most expensive part of the UK.

Why people would spend £2,000,000 on a house in London when they could have an estate in the countryside for the same amount is beyond me.

IAmMiranda Mon 16-Sep-13 18:47:04

This is what £2,000,000 will buy you in Central London, which is arguably the most expensive part of the UK.

Why people would spend £2,000,000 on a house in London when they could have an estate in the countryside for the same amount is beyond me.

2,000,000 properties

Crowler Mon 16-Sep-13 18:58:38

CHJR, there's no gains tax on sale of your own home. You are referring to second/investment properties?

Crowler Mon 16-Sep-13 19:00:36

Why people would spend £2,000,000 on a house in London when they could have an estate in the countryside for the same amount is beyond me.

As a Londoner, I totally agree.

That's your personal choice Iammiranda, not sure what t contributes to the argument. Equally I would loathe living in the countryside, mansion and estate too, I like being close to other people, to life and noise, would feel bored, isolated and frustrated that I would have to drive to get a pint of milk in a hurry. Not to mention the commute if I worked in London and lived miles outside.

PurpleGirly Mon 16-Sep-13 19:16:02

Vixatis it's not too late to change you know - move house, do a job you like, have time to do your own garden, be home earlier - with a house worth £2.3 million you have lots of options available to you. I could not do a job I dislike when I could live a different life that made me happy. There is more to life than work and London!

I am one of those dreadful people that you pay for - a teacher in the state sector at a comprehensive school. Unlike you I don't bring money in to the economy I just educate the next generation. I love my job, am happy, spend time with my family, live in a lovely home and get to go on holiday. My son goes to a fantastic local primary school and will go to an outstanding local secondary. I am really lucky ... I moved back up north as I realised in London I worked for all the wrong reasons and saw none of the benefits. I have never regretted it ( and yes we have theatre, galleries etc etc). I changed my life for a proper life.

Your post made me sad for some reason, to think that you see that as your only option.

We are only here on this earth once.

Steps back and waits to be flamed.

PurpleGirly Mon 16-Sep-13 19:19:34

Oh and sleepwhenidie being further north than London does not mean all the shops disappear ... I am five minutes work from a shop and five minutes walk from countryside. About ten minutes gets me to the centre of a small town that has wine bars and everything!

Crowler Mon 16-Sep-13 19:22:16

Vixatis, can't you be a bit more like Purplegirly?

ophelia275 Mon 16-Sep-13 19:22:47

Vixatis. Just curious. What did your house cost to buy and how much has it increased in value?

MusieB Mon 16-Sep-13 19:24:16

Perhaps, Crowler, because they need to be in London to work and they couldn't do their jobs, raise their family and look after their homes if they had to commute too? See Vix's post above....

Crowler Mon 16-Sep-13 19:32:27

I was kidding. smile

PurpleGirly Mon 16-Sep-13 19:34:06

musieb Vix talks about a job she dislikes, the long hours she works etc. and how if she had her time again she would perhaps have chosen something different (and made some comment about the job being paid formbynthe taxes of others). I was just pointing out that life is too short and she COULD change if she wanted to as selling a £2.3 million house would probably leave her room to change.

PurpleGirly Mon 16-Sep-13 19:36:25

And crowler'why would someone want to be unhappy when they have the power to change their life and be happy? Sarcasm. Doesn't work very well on a typed forum. But seriously, what is wrong with my life that you would say that? I say I am very lucky and happy. Sorry if that is not what all people strive for!!

Crowler Mon 16-Sep-13 19:40:44

Nothing is wrong with your life. There's something wrong with your suggestion that someone else would change their life to be more like yours.

ubik Mon 16-Sep-13 19:43:00


If you don't like it you have the freedom to downsize, send your kid to a state school, use NHS, become a florist etc etc

Yes you work hard - many, many people work hard with far less pay and far less job security in jobs which benefit society a whole lot more.

We are all being asked to give and give some more - we work hard and are worried about affording to heat our home this winter but we know many, many families are far worse off.

I am also one of those dreadful people you pay for - I work frontline NHS.

PurpleGirly Mon 16-Sep-13 19:46:54

I don't suggest that at all, I said that I felt sad at Vix's post where she describes her "ghastly job", her long hours, her need for au pair etc, the fact that she will not be able to stay in her home when retired etc. I made the change to suit me as I was unhappy, just like Vix sounds. No where do I say she needs to live like me, just that I have never regretted making a change.

Would you rather live unhappily or make a change that makes you happy? People can live a good life outside of London. The house prices are ridiculous ...

And the mansion tax is fundamentally wrong for 'normal' houses and families but I don't see a way around that or where the line will be drawn.

Lizzylou Mon 16-Sep-13 19:47:16

I can imagine how annoyed you are vixatis, I can.
But you have chosen your path and your accrued wealth also gives you choices and options.
Something a hell of a lot of people in the UK just don't have the luxury of.

Purple I was talking about having an 'estate' - something that implies a great deal of land around it, probably no corner shop within five minutes' walk hmm - some people's idea of heaven I know, but not mine. Each to their own but I don't see why those who prefer city life should be penalised for it.

LadyRabbit Mon 16-Sep-13 19:54:04

I have a problem with the 'Mansion Tax' for precisely the reasons stated in the post by Vixsatis

It is a very hard conversation to have as modern culture dictates that it is acceptable to be incredibly derisive about those richer than us just because they are richer than us.

I'm sorry, but there are so many posts on this thread that so stink of the politics of envy.

And to those who say - move out of London then - how can it make sense (in terms of it being a fair tax) for someone with a house worth £2m plus to sell, buy a much nicer house elsewhere worth £1.5m and have cash in the bank...their assets are still the same, just held differently, and they will avoid paying! This is a tax based on making people who are worse off feel better and it has the great advantage of being easy to administer, as it's pretty hard to hide a house. It will not dampen the London housing bubble, demand is simply too high from the very rich, but will vastly increase commuter belt prices.

LadyRabbit Mon 16-Sep-13 19:55:46

And where does it say that if you've worked bloody, bloody hard and happened to earn a lot if money you are morally obliged to trade down because other people have perhaps not been as lucky, or quite possibly not worked quite as hard as someone richer than they are?

MusieB Mon 16-Sep-13 19:57:00

Sorry Crowler, I meant to direct my comment to IAmMiranda - posted too slow!

And PurpleGirly it is families like Vix's that are making a massive contribution to the Exchequer and helping keep the UK economy afloat (she said about 50 jobs at her work depended on her and her DH's jobs, quite aside from the help she employs at home). Its not just the tax on her and her DH's earnings, but the tax on those employees' salaries and (if she's in a service industry) the VAT charged on her company's fees to their clients the country would lose if she followed your advice. I'm not flaming you, I think your life sounds good and that you are making a valuable contribution by educating the next generation. But this country relies very heavily on the tax it takes from the London financial services industry (not just banking, but insurance, accountancy and the law - all of which are massive exports). We should be very wary of killing off the golden geese.

Its not just the mega-rich non-doms who are inflating central London property prices but also the rental demand from high-end executives of foreign corporations. Their rents are paid by those corporations. A mansion tax would no doubt lead to higher rents and if the cost of providing housing for their London workers increased significantly then I guess the corporations would start looking at moving their European bases elsewhere. Other cities (I think it might be Frankfurt and Paris) are desperate to lure such businesses away from London and become the new European financial capital. Do we really want to help them achieve this (and lose out on all the income tax paid on these executives' salaries)??

FairPhyllis Mon 16-Sep-13 20:04:48

I think as a tax on unearned wealth (perhaps that what it should be called - I agree that the choice of 'Mansion tax' is deliberate) it's not awfully different in principle from being taxed on interest from savings, is it? Fair enough, lots of people may have bought their houses never intending to use them as investments. But that doesn't change the fact that a house is an asset like any other a person can hold and can change in value no matter what your intentions were. If it's wealth you've accumulated simply by a fluke of timing and location, then why shouldn't you be taxed on it?

On a 2.3 million pound house the annual tax would be 3000 pounds/year, am I right? I'm sorry but I just don't believe that a City professional like Vixsatis would really have such poor retirement planning such that 3000/year would be make or break for them re staying in the house. If you really are going to be living on such narrow margins in retirement then you must have a lifestyle like Liberace, crap pension or be living in a totally unsuitable house. My parents have way more to spare than 3000/year on their pension income and they were public sector teachers!

Lizzylou Mon 16-Sep-13 20:04:56

I don't think it is the politics of envy, Lady. Not at all.
I do think it is possibly very difficult to imagine £2million houses as normal family homes for those of us outside of the SE.

SirRaymondClench Mon 16-Sep-13 20:05:58

And where does it say that if you've worked bloody, bloody hard and happened to earn a lot if money you are morally obliged to trade down because other people have perhaps not been as lucky, or quite possibly not worked quite as hard as someone richer than they are?

^ This

Some of you seem to believe that if someone has done well for themselves whether through hard work or inheritance or whatever they should wear some sort of hair-shirt and sell it all and give everything to those who haven't. Ridiculous!
I do hope those who have suggested that Vix sell up and be just like you are going to take any profit you've made on your house since you bought it and give it to the homeless or those less fortunate, otherwise you'd be hypocrites!
Or possibly if things aren't as wonderful for you, why don't you get another job or retrain? I expect it isn't the done thing to suggest that but yet it seems to be acceptable for you to suggest anyone who has done well should almost be ashamed of it. Anyone of this level of success has paid their share into the system and probably doesn't even use most of the services (NHS, State schools) but that seems to get conveniently overlooked by the jealousy on here.

PurpleGirly Mon 16-Sep-13 20:06:30

musieb my musings were nothing to do with tax, who makes a bigger contribution to the country or who pays most tax - it was to a woman who states her job is "ghastly" and her hours long. As I said her post made me feel sad.

I believe each working person contributes to the country as a whole - without public sector workers the people would suffer, without private sector workers the public sector would not be funded ... Vix does seem to quibble that her taxes pay for public sector workers, but we are as much of a necessity as the private sector. There is too much division and antagonism between the two sectors. There will always be people who want to live their life in London, and those that want to live in the middle of nowhere - again it is personal choice, but I don't understand why someone would chose a lifestyle that makes them appear unhappy!

PurpleGirly Mon 16-Sep-13 20:11:41

SirRaymond I don't think many of us that have commented to Vix are in the slightest bit jealous of her "ghastly job" and lack of family time.

SirRaymondClench Mon 16-Sep-13 20:18:39

You keep commenting on her 'ghastly' job but I can't seem to find the bit in her post about where she wants to live your life Purple. Oh that's right, she never did hmm

morethanpotatoprints Mon 16-Sep-13 20:22:27

As I said many times before though, if private sector companies are unable to keep their workforce in London because of the tax and increasing house prices then they will move.
The north could do with some job creation and a few companies moving up here. Bingo, bring it on.

Lizzylou Mon 16-Sep-13 20:24:07

Actually, Vix says "the benefit of doing these ghastly jobs" herself, Sir.

Madasabox Mon 16-Sep-13 20:24:44

Also who would the people in the 2 million pound houses sell them to in order to facilitate moving into a less expensive house? The number of people who can afford 2 million quid is very very tiny so you could have a number of forced sales and prices would fall and less tax would be realised etc.

Catsize Mon 16-Sep-13 20:27:56

Mansion tax or not, the estate agents and vendors of the properties linked on here via rightmove etc. will be getting very puzzled by the number of hits!

ophelia275 Mon 16-Sep-13 20:28:37

But lots of people work very hard and have to pay 40% tax on their earned income but they can't afford to buy a house because house prices are so much more expensive than they were for the older generation. Why should the younger generation and even those on middle incomes have to pay more tax and conversely pay more for a property and more tax (stamp duty) on it just because they have been priced out of the property market because of the randomness of when they were born?

Perhaps Vix thinks she works harder than her cleaner or her au pair, but presumably they also work long hours for much less pay and are unable to rent in her part of London, let alone buy and will not have a £2.4 million house to trade down for a comfortable pension.

Also, the younger generation will also be paying tax all their lives and well beyond the current pension age. The younger generation already have a much higher tax burden for much less in return.

Redpipe Mon 16-Sep-13 20:29:49

Two wrongs don't make a right.

LadyRabbit Mon 16-Sep-13 20:31:07

Well, given that it was the brainchild of Vince Cable - the man who claims he isn't a Tory but votes with them 99% of the time - it is unlikely to materialise. Unless the next coalition is Lib-Lab and Ed is still in charge.

shudders at thought of Prime Minister Miliband even though Cameron makes my skin crawl

expatinscotland Mon 16-Sep-13 20:32:06

'It is a very hard conversation to have as modern culture dictates that it is acceptable to be incredibly derisive about those richer than us just because they are richer than us.'

I feel the same, but substituting the word 'poorer' for 'richer' in your sentence, because those are whom nearly all the government's policies have targeted.

PurpleGirly Mon 16-Sep-13 20:34:29

Raymond, you clearly do not understand what I have been saying. Vix, throughout her post, bemoans the life she leads. I made the point that I changed my life as I was unhappy and that her post made me sad. Never once did I say she had to live my life. If you are going to shout at me in bold at least get your facts right!

I just feel sad that she is unhappy. Sorry if that upsets you smile

Fairphylis two things on the unearned wealth argument and comparison to interest on savings-

- until you sell it, you don't actually earn anything on gains in your house's value

- I would argue that most people, when they sell their house, buy a more expensive one - and pay the commensurate stamp duty on it (which already is banded higher and higher according to value)

- everyone pays tax on savings income, at the same rate, it is equitable. This is my argument with the mansion tax, it is not equitable at all, it just penalises only the section of people in a position to buy/own crazily expensive houses rather than using their money differently - there are plenty of people with equal/greater wealth who don't want/need to who will pay nothing - I don't see how that can be justified.

LadyRabbit Mon 16-Sep-13 20:45:45

I take your point expatinscotland and I don't disagree that the current government have made some awful welfare decisions that penalise the most vulnerable members of society. It is shameful.

However, that was not the point I was trying to make.
Just as I think using terms like 'chav' or 'pleb' is cruel and horribly condescending about the poor (another word that just sounds so patronising as well) I don't think it's acceptable to label the rich as greedy or undeserving or corrupt. But we are never allowed to say that, possibly because only a tiny percentage of the population are properly rich, and it's fine to punch 'up' but never, never down. I suspect that while many people are aghast that anybody ever votes Tory at all, their voting populace is made up of the aspirational, silent middle class and the rich who affect a daily approach of Noblesse Oblige and then make their feelings known in the ballot box.

We must, must stop peddling this nonsense that there is nobility in poverty however. It stops people thinking that it's okay to want to be rich, to work hard and be prosperous. Money is an amazing tool if wielded with responsibility and consideration for others.

MusieB Mon 16-Sep-13 20:48:34

PurpleGirly you sound lovely! I do know your post wasn't about tax and who pays for what, and you are clearly a very empathic person, feeling sorry for Vix having found herself in the position she does and not being so blinded by her wealth that you couldn't see her unhappiness with her life.

My life isn't unlike Vix's, but for various reasons I don't want to go into for fear of outing myself, it would be very difficult for me to turn my back on my job and flee to the country (much as I'd love to). It would be seen as dishonourable by several people I'm close to and could lead to the closure of the business I work for with serious consequences for many. So I'm just counting the years to retirement (and paying lots of tax in the meantime!)

MusieB Mon 16-Sep-13 20:53:31

FairPhyllis you calculate that the mansion tax on Vix's property would be £3,000 pa and speak disparagingly of her retirement planning in not being able to afford this..

But the fact is that London property prices will probably continue to rise at a considerable rate and that the threshold for the tax, £2m, will stay static. The rate may well increase from 1%. So its very likely that by the time Vix retires the annual liability will be considerably greater.

Redpipe Mon 16-Sep-13 20:59:09

Adding to muse's post
...... 3K a year would be after the tax she will pay on her pension so more likely 5k of her gross pension.

Owllady Mon 16-Sep-13 21:22:00

putting 'vast amounts' of money into the economy seems to have given certain people a false sense of value confused

anyone on PAYE pays the correct amount of % in tax (imo) my husband pays higher rate
we don't get child benefit
blah blah sobbing blah <teeny weeny violin>

I am still not poor and I am still not weeping about having to look after and pay mansion my 2 million house either like most people


I think everyone, maybe? can agree that house prices, rental prices, the inflated cost of living is screwing most people over. I really think they should not have cut the top % of tax though (hides from X) because I think it feeds this kind of mansion tax talk...anyway

BrokenSunglasses Mon 16-Sep-13 21:26:21

No one should go through the majority of their working lives having to plan for a massive tax bill in their retirement.

I can't understand how some of you can't see how fundamentally wrong that is.

Tax people's incomes, purchases, unearned money, inherited wealth. But FFS, you'd think that if you've worked hard enough both academically and physically in your life that you have managed to buy your own home and save enough for your retirement and you are as self sufficient as its possible to be, that you would at least be allowed to keep your own property when you've already paid tax on it.

ihategeorgeosborne Mon 16-Sep-13 21:34:52

Agree with you 100% Owllady. No child benefit for us either, just a small rented house that we could only dream of buying. Oh, to own a £2 million house smile

Nancy66 Mon 16-Sep-13 22:18:22

I agree too owllady. I don't know what the answer is though - I don't think penalising 40 somethings lucky enough to get on the property ladder 20 years ago is the right thing to do though

(for rather selfish reasons, naturally.)

cardamomginger Mon 16-Sep-13 22:24:48

The threshold won't stay at £2 million though, will it? This is the pilot and once the precedent has been set, the administrative kinks have been ironed out, and all the political justifications have been rehearsed as to why it is fair/necessary/acceptable to the populace etc etc, it will be rolled out to include properties of lesser value. Just as the Congestion Charge was expanded, so this will be too.

This might not matter to some of you. You may still have no sympathy with those caught up in this, including those families who do exactly as many of you suggest and sell their 'mansion' and move into a properly of a lesser value, only to find a few years down the line that this is now classified as a 'mansion' too. Presumably they are expected to put up and shut up and thank their lucky stars for their undeserved wealth, or stop moaning and down size yet again.

Someone a few pages ago asked why on earth anyone would chose to live in a £2 million house in London when they could have a HUGE property somewhere else in the UK. I often look at the property pages in the Times, or wherever and fantasise about how we could live in a beautiful Georgian house in the middle of Gloucestershire or wherever. Not that our house is worth £2 million, but it would still convert very nicely into something amazing elsewhere. But we can't because DH's job means he has to live close to Central London. He doesn't save lives, or teach your children. But he does an extremely senior and important job and his input benefits most of you through the work he does in a particular area of technology.

Yes, we could choose to re-train and go and be a florist (I think that was the example given a while ago) and go and live in that Georgian pile. But given that DH is in his early 50s and we have a young child, changing jobs in order to go and live elsewhere in the country and prove I'm not sure quite what point, is not really an option. Unless we are also selfish for wanting to maintain and protect his pension.

Mumoftwoyoungkids Tue 17-Sep-13 00:03:06

redpipe With Equity Release the debt just quietly grows - you do not have to pay to service it. When you die / g into residential care then the bank / insurance company takes their cut first.

It's rubbish if you are a grasping relative who has been eyeing up Aunty's lovely big house for the past 10 years but it does mean that people can stay in their homes and don't have to worry about the cost of their shopping.

Whether the mansion tax comes in or not, your one eyed pensioner neighbour should be thinking about whether it is sensible to keep such a lot of money tied up in his house.

It really depresses me when people go without for their entire lives and then leave some ridiculous amount of money when they die.

Redpipe Tue 17-Sep-13 06:41:31


There is risk attached to equity release though. Say the bank goes bust, say the house price subsequently falls and certainly the rates are not great so the amount need to pay mansion tax would be at least doubled through long term interest every year. There is an element of risk attached.

You say "It really depresses me when people go without for their entire lives and then leave some ridiculous amount of money when they die."

You seem to think that my neighbour would be happier if he sold and moved or did equity release so he'd have more money. I don't think you can see passed the £ signs at all. He is very happy with his life and money is not important to him. Living on the street, for emotional and support reasons is the only thing important to him, he has no desire what so ever for more cash. I am surprised you can't understand that not everyone thinks money is so important, especially older people with a different perspective on life.

Crowler Tue 17-Sep-13 07:22:30

I agree owlady - not cutting the top tax rate would have made a lot more sense.

Home equity as a solution to the mansion tax is not a solution. It's still taking the homeowners money.

Mumoftwoyoungkids Tue 17-Sep-13 08:02:05

Cash by it's very nature is safer than property (where his money is currently invested whether he recognises it or not). By limiting the cash in each bank / building society to £85k then you are protected by the government if the bank fails.

So this is a solution that would enable him to:-

1 Pay his mansion tax
2 Stay in his home until he dies
3 Still have the same amount of pension

If he took out (say) half a million I think that would cover mansion tax for a very very long time.

The amount of equity in his house will be reduced but you said early on he doesn't care about that. So what's the problem?

I don't necessarily think that he would be happier with more money and I don't think he should be spending millions. But what he could do - and what would improve his quality of life - is each year take £5k out of the half a million I have suggested he withdraws from the house. That's about £400 a month. With that he would be able to stop being careful about his shopping and turn his heating up 2 degrees in winter without worrying.

I'm not suggesting he changes his life - I totally get he wants to keep it the same. But it could be the same but without worrying about fuel bills and being able to buy posh biscuits.

BrokenSunglasses Tue 17-Sep-13 08:04:24

Another solution would be to not take an unfair tax in the first place.

People should not have to sell their home or get into complicated equity release schemes to pay tax.

Bluegrass Tue 17-Sep-13 08:21:34

All sorts of exciting ways you can extend this sort of thing to punish people for owning assets that have increased in value. Say someone buys a painting they love from an unknown artist for peanuts. 20 years later the artist is world famous, perfect opportunity for the government to knock on their door and demand a 1% annual payment for their continued right to hang the painting on their wall. And if they can't pay it...fuck 'em, they don't deserve to own it. They should sell it to someone who has sufficient resources to own it, someone rich who deserves to own a valuable painting. Perhaps they could buy a cheap print of the painting to hang in the same spot on the wall (and they can stop fucking complaining that's it not the same and that they loved that painting, they've got the money now so should shut up and count themselves lucky).

I love the way this country's going.

Just to repeat, for information's sake, the proposed mansion tax is 1% of the value over £2M
If your house is worth exactly £2M, there's nothing to pay, if it's £2.1M, the tax is £1k per year.
I know it spoils a good argument, but for those "poor" London dwellers whose properties are just over the threshold, the tax is not very much, certainly not enough to put people on the poverty line.

vixsatis Tue 17-Sep-13 08:34:32

Just for the avoidance of doubt, I was not intending to say that people who work in the public sector do not make a valuable contribution and I certainly don't think they are "dreadful": it's just that the money for the NHS etc has to come from somewhere and I think the contribution of those who generate that wealth is just as valuable.Wealth generating jobs are often not much fun so the money has to be good in order to get people to do them. If the financial security had been equal I would have been an archaeologist- not generally great generators of wealth for the country.

Thank you for the kind thoughts about downsizing etc.. I'm afraid part of the problem is that although we came to London to work I do now feel that London and my house in London are my home; and I love them. I also, for reasons that have nothing to do with buying privilege or hobnobbing with the helicopterati, am pretty committed to paying the school fees. Likewise, most more enjoyable jobs (rather taken with florist idea) would still require childcare; and if I am to stay in my beloved house I will need to earn enough to save up for the mansion tax. Once all that is dealt with, I do have some plans.

I'm not trying to make out that I'm not fortunate (although it has more to do withmaking pragmatic choices and really hard graft); and I do understand that wealth means there are all sorts of things about which I do not need to worry. I just think that this tax is unfair. I also agree with those who worry that it will ruin London.

Must do some work!

vixsatis Tue 17-Sep-13 08:39:49

Inmy spare time Is that definitely the case? I have seen that reported in some places and in others that it would be 1% of the whole value. If you are right, then the tax will, surely, scarcely be worth collecting? I still think it is wrong in principle.

BrokenSunglasses Tue 17-Sep-13 08:41:05

A thousand pounds a year is a lot for anyone to pay to live in their own home, especially when they bought it with money that has already been taxed, and they already paid stamp duty.

Crowler Tue 17-Sep-13 08:46:49

From today's telegraph

"The Lib Dems want to impose a 1 per cent annual levy on homes worth more than £2 million in Britain."

Nothing about above 2M.

onlytheonce Tue 17-Sep-13 08:49:10

There are a couple of slightly different discussions going on:

- Does owning a £2m house make you rich?
- Is the mansion tax a good idea?

IMO the answer to the first is that yes you are rich. Whether it's a good idea or not I'm not sure about. There are issues of fairness, whether there will be undesirable side effects (e.g. pushing up other house prices), will it deter investment etc.

Crowler Tue 17-Sep-13 08:50:06

A thousand pounds a year is a lot for anyone to pay to live in their own home, especially when they bought it with money that has already been taxed, and they already paid stamp duty.


I am getting so worked up over the presumptuousness of the suggestions on this thread that I should take a break - "why don't you just move? why don't you just take a reverse mortgage?"

Because it's their house, bought and paid for, perhaps?


Crowler Tue 17-Sep-13 08:53:27

In the article I posted, there's a further analysis by Knight Frank (estate agents, so to be taken with a grain of salt) that suggests the mansion tax has to be extended to people owning 1.25M houses.

Bluegrass Tue 17-Sep-13 08:57:51

Absolutely BrokenSunglasses. An "asset" only has real economic value if you are using it as a means of exchange, gifting it or otherwise exploiting it to earn income. The government already uses all those opportunities to leap in and claim a sizeable share.

I'm in the process of buying my first house, very modest by a lot of people's standards but at London prices (far far below £2m!). I've never benefitted from owning a place that's risen in value, but I'm having to pay the government thousands and thousands of pounds out of my hard saved and previously taxed income for the pleasure of buying it. If I ever sell it then someone else will have to give the government thousands of pounds more to buy it from me. If I leave it to my child they will have to pay the government thousands in inheritance tax.

That house is already a cash cow and successive governments will continue to milk it every time it changes hands until the teats are raw. Apparently that isn't enough though, and they are now suggesting that they deserve money if you simply continue to own a house with a paper value that exceeds some arbitrary sum. If the market started fluctuating and your house was on the cusp hopefully they would tell you which days you had to pay them for and which you didn't.

onlytheonce Tue 17-Sep-13 08:57:55

That was if the tax had to raise £1.7m. I didn't realise that the numbers were so small. So it's not a revenue generator for the government. Only reason for it is to stop runaway prices, but I'm not convinced that it will work.

New Statesman Article says it's just the value over £2M.

onlytheonce Tue 17-Sep-13 08:58:50

(Replying to Crowler)

onlytheonce I don't believe for a second that it will slow price rises down, more overseas investors will buy up the properties and let them out. A friend of mine is an ex-pat working in Doha for tax free salary, he and every other expat he knows are looking to invest, or have already invested in London property, with no intention whatsoever of ever living in it. The mansion tax won't deter them.

onlytheonce Tue 17-Sep-13 09:04:54

Bluegrass your post comes across as incredibly self serving. How about you put it like this: I can afford to buy a house in the most expensive place in the country and any inheritance I leave will be over £325k (at today's prices). Sounds like you're doing pretty well to me.

Crowler Tue 17-Sep-13 09:05:26

theonlyonce: I found that surprising as well. Why bother?

Of course this is all a work in progress, who knows how the mansion tax will work.

I expect of course that housing associations based in Central London will be exempt? Do we know how this would impact landlords of large buildings who would be hit very hard vs landlords of many small buildings who would not be hit at all?

How will this even work?

ophelia275 Tue 17-Sep-13 09:05:54

Both parties are responsible for this mess. Labour started it by keeping interest rates low, whilst their friends in the banks were offering 125% mortgages and attracting BTL at the expense of first time buyers.

The Tories have perpetuated it with things like Help to Buy and Funding for Lending.

Really it seems that both parties are in thrall to the banks for some reason. Seriously, this is all to keep banks in profit.

The very same banks that got us into the crisis are now sitting pretty with the arbitrage on what they pay (and get from the taxpayer) and what they charge and because the government has given them so much money for liquidity (Funding for Lending) they can offer paltry savings rates to those who have been prudent.

The moral of the story = don't save or be prudent. Spend recklessly, buy a home you can't afford and you will be rewarded by the government.

Crowler Tue 17-Sep-13 09:06:49

theonlyonce, maybe Bluegrass didn't even google the inheritance allowance - maybe she was speaking theoretically. Who knows. Her point is correct, that with each transfer of the property, the government takes a chunk - it is in fact a cash cow.

onlytheonce Tue 17-Sep-13 09:08:14

And I say that as someone who has just had to pay 3% stamp duty, and will be paying inheritance tax when my parents pass away. I think I'm very lucky (and yes I work hard yadda yadda).

Bluegrass Tue 17-Sep-13 09:11:52

Onlytheonce - I'm aiming to buy in what is considered one of the dodgier parts of a London which at least reduces my commute to just under an hour, a place that large numbers of people on here would apparently not want to live in for love nor money as life is evidently so much better once you get out of the SouthEast.

I receive a higher salary to work in London which immediately gets eaten up by the cost of housing and commuting, but fuck it, it's home to me.

Perhaps we can tax the fuckers living in their cheap housing within easy reach of the rolling hills and verdant fields of Northern England as apparently they are all living a much lovelier life than I am down here (it's just that I'm expected to pay through the nose for it!).

And breathe.

Crowler Tue 17-Sep-13 09:15:24

Question for all the proponents of the mansion tax-

What if the Central London housing association buildings are forced to pay the mansion tax because of their huge value - and pass this along to their residents?

(Inevitably, landlords will pass this on to their tenants - is there some kind of exemption? Do we know?)

onlytheonce Tue 17-Sep-13 09:18:28

You could say that any tax is a cash cow. People seem to get into an idea that is themselves against the government, with the government trying to rob them of as much as they can, whereas I view it as a balance sheet. It is reasonable to consider both sides of the balance and argue for or against certain positions, but it does need balancing at the end of the day.

merrymouse Tue 17-Sep-13 09:22:00

I think that £2m is an expensive house, even in London. However, I think it would be difficult to administer because

1) if you have an expensive house you have the means to challenge your tax bill.
2) who values the house? Until the house is sold, any value is notional.

Taxes are designed to raise money or change behaviour. It's not really clear whether it would do the first or what the aim of the second would be.

Bluegrass Tue 17-Sep-13 09:26:19

Onlytheonce - I think there is a big difference between a tax on economic activity, the exchange of goods, and a tax imposed on someone for merely continuing to own a thing. A 2000 square foot house in Primrose hill and a 2000 square foot house on Arran are both just houses putting a roof over people's heads. Tax them when they are sold if you have to, tax people for the local services they receive by all means, but taxing someone for owning one of them just because one is potentially more valuable than the other even though it currently does exactly the same thing - they can fuck right off.

Redpipe Tue 17-Sep-13 09:27:45

"I don't necessarily think that he would be happier with more money and I don't think he should be spending millions. But what he could do - and what would improve his quality of life - is each year take £5k out of the half a million I have suggested he withdraws from the house. That's about £400 a month."

You just can't accept he doesn't want any more money can you? He is happy the way he is he doesn't want any more cash each month....seriously!!!!

Also drawing down £500K with compound interest which is currently around 5% and could increase would very quickly run away!

Debt Interest

Total Interest in 5 years 138K on top of paying the mansion tax itself. Fair I don't think so but you do obviously hmm

It would compound even further each further year.

Redpipe Tue 17-Sep-13 09:30:06

"I don't necessarily think that he would be happier with more money and I don't think he should be spending millions. But what he could do - and what would improve his quality of life - is each year take £5k out of the half a million I have suggested he withdraws from the house. That's about £400 a month."

You just can't accept he doesn't want any more money can you? He is happy the way he is he doesn't want any more cash each month....seriously!!!!

Also drawing down £500K with compound interest which is currently around 5% and could increase would very quickly run away!

Debt year 1-5 increase

Interest each year increase with compound interest year 1-5

Total Interest in 5 years 138K on top of paying the mansion tax itself. Fair I don't think so but you do obviously hmm

It would compound even further each further year.

onlytheonce Tue 17-Sep-13 09:33:06

Bluegrass, if you look at what I've posted I haven't said I support the mansion tax. I don't have a problem with something being taxed for its value, but I'm not sure that the mansion tax will achieve anything other than pissing people off. If it helped calm the London housing market down, or got money out of foreign investors who don't pay much tax in this country then it seems reasonable. But the revenues generated appear to be tiny, and it hasn't been shown that it will calm the market.

merrymouse Tue 17-Sep-13 09:34:29

There is already capital gains tax on second homes - maybe there could be CGT on primary residences over a certain value? I don't know whether this is a good idea, but it makes more sense than taxing somebody on a notional value.

Crowler Tue 17-Sep-13 09:35:10

Fair enough onlyonce but there's a philosophical difference between a tax on income and a tax on ownership. You're commingling the two in your above post.

onlytheonce Tue 17-Sep-13 09:36:34

I think we just differ on our stance on that then.

VoiceOfRaisin Tue 17-Sep-13 09:51:07

fairphyllis you say that the mansion tax is only like tax on savings account interest. In fact a mansion tax is more like taxing the principal sum of the savings account (even if it is paying no interest at all). That's the problem.

If the mansion tax did ever come to pass, I also fail to see why it should be limited to homes over £2m. The tax would be a graduated one anyway if it were, say, 1%. The cheaper the property, the less the tax. Of course, it would be nowhere near so popular because more than 0.5% of the population would have to pay it. It would also still be unfair on those in the SE.

Redpipe Tue 17-Sep-13 09:54:40

"In fact a mansion tax is more like taxing the principal sum of the savings account (even if it is paying no interest at all). That's the problem."


merrymouse Tue 17-Sep-13 10:03:07

in fact a mansion tax is more like taxing the principal sum of the savings account

Except atleast with money in a bank account you would know how much it was worth from day to day. As has already been said, until it is sold the only value a house has is it's use as a building.

Crowler Tue 17-Sep-13 10:09:53

I foresee a glut of 2M houses being converted to two "flats" and a "house to flat conversion" cottage industry springing to life overnight.

They've already done that across West London at least.
My DSis rented a basement flat a few years ago (over £1k p/m) with one window and no bin collection.

Mumoftwoyoungkids Tue 17-Sep-13 10:19:59

Redpipe But he wouldn't be spending all of the money at once so the money held in the bank would also earn interest reducing the difference. Plus his house would continue to go up in value.

If he really doesn't want any more money then that is great. I just wasn't sure if he knew that the option was available and in your original description of him he sounded like he might be struggling. Sadly some of the elderly who die due to fuel poverty each winter do so in very expensive houses. However, if posh biscuits wouldn't make his life nicer then that is great.

My own grandmother used money to enable her to stay in her own home until she died aged 96. Nothing fancy - someone to do the hoovering and mow the lawn, putting a downstairs loo in, a taxi to church every week and (after she fell and because she felt the beeper was undignified) someone to pop in every morning, tidy up the breakfast things and check she was ok. Boring stuff but it kept her out of a nursing home which was her wish.

Actually overall I would describe myself as against the mansion tax. I just felt your whole "poor pensioner" argument was a bit silly. There are other much more sensible points that have been made against it.

My view is that it is a silly gimmick come up with by the Lib Dems to try and make all the (generally left wing) people who voted for them last election and now think they are just an extension of the Tory party think that they are "men of the people" after all. It's impractical and is never going to be voted in by (millionaire) Dave and all his rich pals. They would have to pay it!

merrymouse Tue 17-Sep-13 10:24:51

Well atleast they got through that completely I controversial supported by the daily mail 5p bag thing. Go libdems!

merrymouse Tue 17-Sep-13 10:25:34

Uncontroversial not I controversial.

Crowler Tue 17-Sep-13 10:29:20

InMySpareTime, I meant more something like this:

1. Find out the meaning of a "flat", per building control;
2. Divide houses into 2 flats; implement changes to pass building control; building control leaves & house is put back (or not? maybe some clever architect designs a "kitchen" that can fit in a closet?).

Job done - you now own 2 x 1M properties.

If the tax is levied on the entire house vs the value exceeding 2M (we have some differing info here) - this more than pays for itself. The only way for the government to prevent this is by way of putting very unsavory (fascist?) controls in place.

Beastofburden Tue 17-Sep-13 10:30:34

I think the example pensioner in a very expensive London house could be allowed to defer his mansion tax payment until death or sale of the house. When his house is sold or inherited it will be worth more than that of a similar pensioner in another part of the UK, so he/his family will hardly be out of pocket- they will just a little bit of what has been the most massive windfall.

Beastofburden Tue 17-Sep-13 10:32:05

Crowler- I would guess they would exempt charities generally from this. Charities dont generally pay any kind of taxes.

Mumoftwoyoungkids Tue 17-Sep-13 10:32:50

merry grin

It's just so depressing though. They had nearly a century to sit quietly on the backbenches and come up with what they would do if they ever got the teensiest bit of power. And then they did. And look what we got!

Redpipe Tue 17-Sep-13 10:39:33

"I just felt your whole "poor pensioner" argument was a bit silly."

I would say the idea that someone should equity release and lose huge sums of money to the bank in interest in order to fund a tax was silly too.

We'll have think each others arguments silly then.

Crowler Tue 17-Sep-13 10:48:20

Beastofburden - but the City of Westminster (for example) is not a charity, and I believe they do pay some taxes.

If the City of WM owns residential buildings exceeding 2M (and they certainly do), on what basis should they be excluded from the mansion tax? Should all landlords be exempt?

Sweetsweep Tue 17-Sep-13 10:49:45

The thing is, you are saying he may have to move when he doesnt.

So is this thread really about him moving, or about mansion tax in general.
[which I presume may apply to you too, and is probably what this thread is really all about].

Redpipe Tue 17-Sep-13 10:59:25


You presume wrong. I used this guy as an example because people predictably were jumping in with arguments that if you own a 2m property you had the money to pay for this tax. I was trying to show that this is not always the case and the only way to pay for some people would be to sell their home with all the negative implications that could have on their life.

It is not about moving it is about the misconception that a house price has any relevance on your day to day wealth unless of course you sell it AND move some where else.

Beastofburden Tue 17-Sep-13 11:07:41

Crowler- I can't see any justification for a blanket exclusion on all landlords.

This is only a tax; if you don't pay any taxes, you wont pay it. Lots of public bodies and charities are exempt from taxes as it is- Public bodies like local authorities, I dont think pay taxes; Housing associations, like Universities, churches and the like, being charities already, I am sure don't.

redpipe- my view is your neighbour should not have to pay any cash during his lifetime, but that the estate has to pay the accumulated tax on his death. His estate will still be very much larger than if he had lived somewhere else.

Crowler Tue 17-Sep-13 11:10:39

But Westminster does pay certain taxes to the federal government. Like VAT. Why shouldn't they pay this?

Redpipe Tue 17-Sep-13 11:13:08


So in this scenario, the banks will be the biggest winners out the mansion tax then and the house owner will lose a large percentage of the increase in his property even though when he dies a huge proportion would be taken in tax anyhow. If you think that's ok then I can't debate this any more with you.
Each to their own.

Beastofburden Tue 17-Sep-13 11:16:19

federal government, crowler? grin we dont have one of those here...

VAT is a funny tax. You get exemption a different way, because it is too complicated to rock up in a shop and demand a different price from everyone else. So you get what is called partial or full exemption. You tell the VAt man how much VAT you paid in the last quarter, and you get a refund of some or all of it, depending on how much of your income is from what they call "exempt activities" and how much from "business activity". The main thing is never to try to understand how the VAT man decides this, because it will make your eyes bleed. For instance, in a University, which is a charity, any activity which support research is VAT exempt (unless its commerical research) but teaching isn't because, even before the £9k fee came it, it was deemed to be a "business activity". So Universities tend to pay VAT at a lower rate than the general populationl but you would never know that unless you saw their VAT returns.

Is this a new kind of TMI?

Beastofburden Tue 17-Sep-13 11:17:28

redpipe, not a very large proportion of what would be truly astonishing wealth to people in almost any other part of the country.

I am not sure if I do think it's OK or not- I am just saying that it is not automatically a cashflow issue.

Crowler Tue 17-Sep-13 11:18:54

I'm sure you can see my point that I'm trying to make.

Exempting Westminster is another subsidy to a pretty fortunate group: is there anyone who is luckier than one sitting on a lifetime tenancy agreement in Knightsbridge?

And it does beg the question: how to manage the mansion tax as it hits landlords & they pass it onto their tenants - the poor ones. Do you pass a law forcing LL's to absorb it? Do you increase HB? Do you exempt landlords who have poor tenants? How do you distinguish between a property that generates rent of 5K per week vs property that generates 100GBP per week? How do you maintain it?

Mumoftwoyoungkids Tue 17-Sep-13 11:23:38

It's not great but the fact remains that he would not "lose" anything - his heirs would receive less inheritance than they were maybe expecting but he would be able to stay in his own home. Going on the grounds that mansion tax comes in (I have already said I'm against it so I'm arguing from a pragmatic point of view) how do you think he should pay it?

Or should he not and risk going to prison?

Redpipe Tue 17-Sep-13 11:26:26


It depends on ones attitude to debt. If one has paid of their mortgage and is risk adverse they may not want to equity release. The property could go down in value and there is potential for the person to have nothing left.

Equity release is not something everyone would be comfortable doing and I don't think someone should have to do it to pay a tax that could have no bearing on the actual sale value of the property.

Will the person get the debt interest and fees paid back for them if the property does decrease significantly in value before they sell?

Beastofburden Tue 17-Sep-13 11:28:49

crowler- not trying to be obtuse! thanks for the extra detail.

So two separate scenarios.

Westminster lifetime tenancies- here we have a group of tenants where the suggestion is that the local council ought to be charging them a lot more rent. Getting the Council to pay mansion tax and then pass it on would in this case result in a rent increase that would strike most people as pretty fair.

Other landlords whose tenants are likely to be far more vulnerable- that is to be avoided as they already pay far too much in rent.

Using any tax and sundry exemptions or rules around it to control rents indirectly is probably going to be full of these contradictions and a danger of outcomes that we would all agree are bad. Mansion tax is only one of the costs that might vary for landlords. The other big one is interest, of course. Other places have discussed whether we ought to have rent controls in place, rather than relying on the market to stop people overcharging.

In all this I seem to have ended up looking like a supporter of the tax. I'm not really, it's just that not all the arguments against it here seem to me to be quite right. I think my view is you could raise a lot more by closing the loopholes that allow people (often sophisticated, wealthy individuals) to use companies to avoid paying a proper amount of stamp duty.

Redpipe Tue 17-Sep-13 11:30:10

It's not great but the fact remains that he would not "lose" anything

That is not true. If he used equity release and then decided to sell and the property had gone down in value or stayed the same he would have lost a lot.

Property prices are never real until someone has completed. This fluctuation especially over years is why this tax is frankly ridiculous, to implement, manage and is unfair.

Sweetsweep Tue 17-Sep-13 11:30:30

But he doesnt have to sell either, does he. That is the problem with what you are saying. That, and because you live in a bubble, that 2m is not rich which staicks on my throat rather.
fwiw, we have sizeable assets too, but I always keep my feet on the ground money wise, regarding wealth, and have an understanding of others plights.