To think that the mansion tax breaks the principles of taxation

NorthXNorthWest · 2025-11-29T10:26:07+00:00

Most taxes fall into: Income you receive Profit you realise Spending you choose Council tax sit outisde of this. Its more like levy based valuation bandings and was a quick and dirty fix after the poll tax fiasco. It is effectively a service charge not a wealth tax. Whereas mansion tax is the government estimating the value your actual house, then treating this valuation as pure profit then taxing you on this. Given the majority of homes are purchased with mortgages and paid for by already taxed money: Why is Mansion Tax = Estmated value × % More reasonable than CGT = Profit * % (Profit = Actual sales price - (Purchase price + actutal costs) With actual costs being renovations not stamp duty or interest paid on your mortgage I am not in the mansion tax bracket. I do accept that some taxes need to rise but I don't believe this is the solution.

ThisTicklishFatball · 05/12/2025 21:37

HiHiHiHiHiHello · 30/11/2025 09:11

We need to start taxing wealth, not income.
income doesn’t make you wealthy. As a high earning dual high income family, with high mortgage, high childcare fees, high cost of living, but no inherited wealth, we are not wealthy.
We’ve both worked extremely hard, done several degrees with no financial backing or wealth behind us. We’ve always worked very long hours, weekends, late into the night.
It’s been a long uphill struggle and the future is still uncertain.

Those around us with familial wealth, land, multiple properties, very high value properties who themselves work much less, earn much less, spend more time with their kids, yet pay less tax. All whilst being able to afford multiple holidays and private school. How is this fair? Income tax does not tax true wealth.

We should be taxing billionaires, big corporations, those with land/multiple properties and prevent wealth from being off-shored. The real reason times are getting harder is that true wealth, large assets, land, global corporations are not taxed enough.

I completely understand the frustration around inequality, but I’m not convinced a wealth tax is the magic fix people imagine.

It sounds neat in theory, but in reality it risks creating more problems than it solves. Most “wealth” in the UK isn’t yachts and offshore accounts; it’s ordinary people’s homes, pensions, and long-term investments. A broad wealth tax would end up hitting the people who bought their house, not some billionaire hiding assets behind a shell company.

Taxing land or multiple properties sounds simple until you realise who else gets swept up in it: small landlords who aren’t exactly living like oligarchs, retirees relying on rental income, farmers who have land but not the spare cash to pay a yearly tax bill, and anyone who is asset-rich but cash-poor. These are the people who’d end up having to sell just to pay the tax. Meanwhile, big corporations would glide around the new rules by restructuring faster than the ink dries. The ultra-rich don't pay wealth taxes; they avoid them. Large corporations would find loopholes instantly, leaving middle earners with a house and pension to foot the bill.

Income tax isn’t perfect, but at least it’s based on actual earnings rather than the theoretical value of something you can’t spend unless you sell it. Inequality is absolutely real and needs tackling, but broad wealth taxes tend to hit regular people far harder than the very wealthy. In many ways, the simplest system ends up being the fairest.

If the government genuinely wanted to raise revenue without squeezing workers or going after people’s homes, there are far better options. Close the loopholes that large companies treat like a basic human right — billions vanish every year in accounting gymnastics. Make corporations pay tax where their profits are actually earned, not where they’ve parked a PO box.

Stop handing out enormous contracts to consultants who earn more in a week than most households make in a month, and strengthen the public sector so it can do the job itself.

Fund HMRC properly so it can actually enforce the laws we already have.

Rebuild a proper industrial base rather than relying on low wages and constant imports. Encourage investment, innovation, and productive industries instead of endlessly squeezing the same group of earners harder every year.

The UK doesn’t have a lack of potential revenue. It has a lack of political will to collect it from the right places.

Original poster

NorthXNorthWest · 02/12/2025 17:23

TunnocksOrDeath · 02/12/2025 17:17

A transaction is an exchange between two parties - There is no "transaction" if you are just living in your home. The owner doesn't get given cash when the value of their home theoretically rises - the cash crystalises when the ownership of the property changes hands.
My flat is worth over 30% more than I paid for it 12 years ago - Taxing me on it's assumed current value would ignore fact that I simply could not afford to buy it now, and although it will never be subject to the mansion tax - I think that illustrates the issue. I haven't actually got any extra money just because the assumed value of my flat has gone up.
If you buy a home, the transaction is the purchase. If you inherit a home, the transaction is the point at which ownership transfers, and then you can keep it or flog it. Honestly, I think it's fine to stick a larger tax on people at those points, if needed, as those are the points at which they can decide to just live somewhere cheaper, and not at a point when it's due to circumstances that are largely out of their control.

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Don't worry, if you ever do find yourself in this position, affordability won't be an issue. I suspect you will be able to defer payment until you sell your flat/house. They will of course need to charge you interest on the loan that they are advancing you🙄

It's a tax on living somewhere that lots of people want live, to fund benefits street. Nothing more, nothing less. People like it because the government is sticking it to the rich...

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TunnocksOrDeath · 02/12/2025 17:17

RedTagAlan · 02/12/2025 16:36

Surely this tax is happening at the time the transaction occurs ? It's an annual charge, so it's due each year that you own the property.

Is it not like a tv license or road tax. Pay yearly.

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A transaction is an exchange between two parties - There is no "transaction" if you are just living in your home. The owner doesn't get given cash when the value of their home theoretically rises - the cash crystalises when the ownership of the property changes hands.
My flat is worth over 30% more than I paid for it 12 years ago - Taxing me on it's assumed current value would ignore fact that I simply could not afford to buy it now, and although it will never be subject to the mansion tax - I think that illustrates the issue. I haven't actually got any extra money just because the assumed value of my flat has gone up.
If you buy a home, the transaction is the purchase. If you inherit a home, the transaction is the point at which ownership transfers, and then you can keep it or flog it. Honestly, I think it's fine to stick a larger tax on people at those points, if needed, as those are the points at which they can decide to just live somewhere cheaper, and not at a point when it's due to circumstances that are largely out of their control.

Original poster

NorthXNorthWest · 02/12/2025 17:15

TunnocksOrDeath · 02/12/2025 15:55

I generally adhere to the principle that taxation should happen at the point that a transaction occurs, so that the parties involved can factor it in to their decision making. The new tax fails that test - none of us know what will happen where we live 10 or 40 years from now, and how the local prices will be affected - Just look at Notting Hill - Total dive in the 1980s but 25 years later it was eye-wateringly expensive.
There's also the problem of accurate valuation. We should tax things on their actual value, not their assumed value. I posted about this a couple of days ago and some bright spark said there were AI tools they can use now - but there aren't. There is no AI tool in existence that could have accurately identified that my parents neighbour who died recently was in a house with electrics and plumbing that hadn't been looked at in over 40 years, that the inside hadn't been decorated since before decimalisation, that the windows were draughty, and the back garden overgrown. All you can see from the road is a partial view of the front of the house, because there was a bloody great big hedge in front of it. The family who bought the house bought it cheap, knocked it flat and re-built on the plot. Had this property been subjected to the drive-by valuations that will be used for the new tax, they would have assumed a much higher value than was appropriate, given the condition.

They will use AI if it helps slant things in their favour. A lazy tax needs a lazy tool and a narrow interpretation. Minimum effort for maximum damage, carefully aimed at a small enough group to avoid a repeat of the poll tax backlash. If a mansion tax had existed earlier, Notting Hill’s gentrification would only have been accelerated. But I suppose that’s fair, because poorer workers clearly have no business in large houses or desirable areas. And if they do somehow make it there, we will make sure it is difficult to stay unless they are on benefits. After all, a £2m council house isn’t a mansion, so an exemption applies.

It also ignores actual profit. Buy for £900k, spend £500k, sell for £2.1m and only £700k is real gain, yet the tax treats the whole value as if it were a windfall. Stamp duty, legal fees and years of mortgage interest are simply wished away. And what happens if you are forced to sell at a loss?

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Original poster

NorthXNorthWest · 02/12/2025 16:55

schoolfriend · 02/12/2025 15:26

https://ifs.org.uk/articles/how-fix-property-taxes

This is a genuinely good listen (in my humble opinion).

There's a lot of hate for SDLT and council tax, for a variety of reasons.

ETA - the whole 'how to fix' series on various different types of taxes are all very good and the one on wealth taxes obviously strays into the subject of this post somewhat.

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Thanks I will take a look. Hoping in advance that it is not a land valuation tax...

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RedTagAlan · 02/12/2025 16:36

TunnocksOrDeath · 02/12/2025 15:55

I generally adhere to the principle that taxation should happen at the point that a transaction occurs, so that the parties involved can factor it in to their decision making. The new tax fails that test - none of us know what will happen where we live 10 or 40 years from now, and how the local prices will be affected - Just look at Notting Hill - Total dive in the 1980s but 25 years later it was eye-wateringly expensive.
There's also the problem of accurate valuation. We should tax things on their actual value, not their assumed value. I posted about this a couple of days ago and some bright spark said there were AI tools they can use now - but there aren't. There is no AI tool in existence that could have accurately identified that my parents neighbour who died recently was in a house with electrics and plumbing that hadn't been looked at in over 40 years, that the inside hadn't been decorated since before decimalisation, that the windows were draughty, and the back garden overgrown. All you can see from the road is a partial view of the front of the house, because there was a bloody great big hedge in front of it. The family who bought the house bought it cheap, knocked it flat and re-built on the plot. Had this property been subjected to the drive-by valuations that will be used for the new tax, they would have assumed a much higher value than was appropriate, given the condition.

Surely this tax is happening at the time the transaction occurs ? It's an annual charge, so it's due each year that you own the property.

Is it not like a tv license or road tax. Pay yearly.

TunnocksOrDeath · 02/12/2025 15:55

I generally adhere to the principle that taxation should happen at the point that a transaction occurs, so that the parties involved can factor it in to their decision making. The new tax fails that test - none of us know what will happen where we live 10 or 40 years from now, and how the local prices will be affected - Just look at Notting Hill - Total dive in the 1980s but 25 years later it was eye-wateringly expensive.
There's also the problem of accurate valuation. We should tax things on their actual value, not their assumed value. I posted about this a couple of days ago and some bright spark said there were AI tools they can use now - but there aren't. There is no AI tool in existence that could have accurately identified that my parents neighbour who died recently was in a house with electrics and plumbing that hadn't been looked at in over 40 years, that the inside hadn't been decorated since before decimalisation, that the windows were draughty, and the back garden overgrown. All you can see from the road is a partial view of the front of the house, because there was a bloody great big hedge in front of it. The family who bought the house bought it cheap, knocked it flat and re-built on the plot. Had this property been subjected to the drive-by valuations that will be used for the new tax, they would have assumed a much higher value than was appropriate, given the condition.

schoolfriend · 02/12/2025 15:26

NorthXNorthWest · 02/12/2025 14:10

Transaction taxes like SDLT are bad because they stop people making trades that would benefit everyone.

I have been thinking this comment quite a lot.

You are right that SDLT blocks movement. The real question is what kind of movement we are encouraging? and what does a 'beneficial' trade look like? Work is concentrated in too few places, so people move south for jobs, benefit from London house price inflation, then move out when they have children, exporting that inflation into areas where local wages are lower. Add to that the impact of second homes and holiday lets displacing locals in coastal and rural towns, and you get even hotter markets with even weaker local wages underneath. Making movement easier without fixing jobs, supply and infrastructure just accelerates these pressures. It also carries real costs for families and communities through longer commutes, broken networks and weaker cohesion. Mobility can clear blockages, but it can't fix a chronic housing shortage. Without serious building, transport and regional growth, both SDLT and the mansion tax just reshuffle who pays while the core problem stays exactly the same. In truth neither is right.

I believe the mansion tax looks like a fairness move, but in reality it’s a false flag. It little, signals a lot, and quietly sets up the machinery for inevitable tax creep. Creep that will lock even more people in place.

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https://ifs.org.uk/articles/how-fix-property-taxes

This is a genuinely good listen (in my humble opinion).

There's a lot of hate for SDLT and council tax, for a variety of reasons.

ETA - the whole 'how to fix' series on various different types of taxes are all very good and the one on wealth taxes obviously strays into the subject of this post somewhat.

Original poster

NorthXNorthWest · 02/12/2025 14:10

GeneralPeter · 30/11/2025 05:14

When we are looking for the least-bad, I think a property value tax is less bad than SDLT.

Transaction taxes like SDLT are bad becuase they stop people making trades that would benefit everyone.

For example, I’d like to live in a small home near school. I actually live in a large home near someone else’s school.

Extra commute for all involved and unused space. No one benefits, not even the govt, but to fix it by moving for a few years would cost too much in SDLT.

A property value tax doesn’t distort behaviour in that way.

You mentioned fairness: why should someone who moves five times pay five times when someone who doesn’t move pays once? The frequent mover isn’t committing some sin to be punished (the opposite: they are often moving for work, which is a good thing), and is usually not richer either. In fact they are usually younger and therefore less rich on average.

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Transaction taxes like SDLT are bad because they stop people making trades that would benefit everyone.

I have been thinking this comment quite a lot.

You are right that SDLT blocks movement. The real question is what kind of movement we are encouraging? and what does a 'beneficial' trade look like? Work is concentrated in too few places, so people move south for jobs, benefit from London house price inflation, then move out when they have children, exporting that inflation into areas where local wages are lower. Add to that the impact of second homes and holiday lets displacing locals in coastal and rural towns, and you get even hotter markets with even weaker local wages underneath. Making movement easier without fixing jobs, supply and infrastructure just accelerates these pressures. It also carries real costs for families and communities through longer commutes, broken networks and weaker cohesion. Mobility can clear blockages, but it can't fix a chronic housing shortage. Without serious building, transport and regional growth, both SDLT and the mansion tax just reshuffle who pays while the core problem stays exactly the same. In truth neither is right.

I believe the mansion tax looks like a fairness move, but in reality it’s a false flag. It little, signals a lot, and quietly sets up the machinery for inevitable tax creep. Creep that will lock even more people in place.

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Original poster

NorthXNorthWest · 02/12/2025 12:40

I was thinking cars.+ public. I was under the impression it could be hit and miss in some places but that it was better in general. We have friends across the US and they have all commented on how bad it seems here. @poetryandwine

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poetryandwine · 02/12/2025 12:17

NorthXNorthWest · 02/12/2025 12:00

Fair point. However in the US, property tax sits inside a housing system that can still expand through cheap land, mass building and also real escape routes in many areas ie you can move to the edge of town and still keep transport links, jobs and affordability. In the UK, the same regressive tax is forced on people trapped in a market shaped by decades of under-building and extreme shortage. You can move further out, but transport is limited, expensive and inefficient if it exists at all. We have less land, tighter planning, higher prices and higher mortgage rates, yet we tax as if people have endless mobility and choice. Same tax label, completely different reality.

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Do you mean public transport?

Public transport in many places in America is terrible. We had great PT where I lived but it was sustained by a property tax of 2% pa. In an expensive housing market

Original poster

NorthXNorthWest · 02/12/2025 12:00

poetryandwine · 02/12/2025 11:11

Yes, but PT is a % of current value, generally much higher than CT.

The US doesn’t have Stamp Duty but there is capital gains tax due at one’s usual rate to both federal and state governments upon the sale of the primary residence. For high earners in California, for example, these rates add to 33.3%.

The amount of exempt profit is $250K for a single, $500K for a couple.

In expensive states, that doesn’t begin to touch the sides of the rise in house prices in expensive areas for homeowners who bought twenty or more years ago. Again, much more than stamp duty

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Fair point. However in the US, property tax sits inside a housing system that can still expand through cheap land, mass building and also real escape routes in many areas ie you can move to the edge of town and still keep transport links, jobs and affordability. In the UK, the same regressive tax is forced on people trapped in a market shaped by decades of under-building and extreme shortage. You can move further out, but transport is limited, expensive and inefficient if it exists at all. We have less land, tighter planning, higher prices and higher mortgage rates, yet we tax as if people have endless mobility and choice. Same tax label, completely different reality.

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poetryandwine · 02/12/2025 11:11

Fluffypuppy1 · 02/12/2025 08:58

Most countries don’t have stamp duty or council tax. The property tax is instead of, not as well as, stamp duty and council tax.

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Yes, but PT is a % of current value, generally much higher than CT.

The US doesn’t have Stamp Duty but there is capital gains tax due at one’s usual rate to both federal and state governments upon the sale of the primary residence. For high earners in California, for example, these rates add to 33.3%.

The amount of exempt profit is $250K for a single, $500K for a couple.

In expensive states, that doesn’t begin to touch the sides of the rise in house prices in expensive areas for homeowners who bought twenty or more years ago. Again, much more than stamp duty

RedTagAlan · 02/12/2025 09:36

Fluffypuppy1 · 02/12/2025 08:58

Most countries don’t have stamp duty or council tax. The property tax is instead of, not as well as, stamp duty and council tax.

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A quick web search, Australia, Dubai, France, HK, Italy, Japan, Portugal, Singapore, Thailand, UK, Spain, Denmark, India, Pakistan,Uruguay, Isreal, Poland, Russia, Ireland, Romania....

All have stamp duty.

Fluffypuppy1 · 02/12/2025 08:58

Ginmonkeyagain · 30/11/2025 13:45

And plenty of countries, including the USA have an annnual property tax.

Most countries don’t have stamp duty or council tax. The property tax is instead of, not as well as, stamp duty and council tax.

RedTagAlan · 02/12/2025 04:26

BitOutOfPractice · 01/12/2025 18:57

I think you have me mixed to with another poster!

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Sorry :-)

There is a couple of threads on these tax things, and a bit of crossover is happening in my head I think.

Newmeagain · 01/12/2025 19:09

Swiftie1878 · 29/11/2025 11:09

Tbh, the mansion ‘tax’ is so piddling in value, it’s really just a political statement - ‘Look! We’re taxing the rich!’

Absolute nonsense.

What I really hate is the fact that it has been informally described as a mansion tax. I agree it’s about the government making a statement.

BitOutOfPractice · 01/12/2025 18:57

RedTagAlan · 01/12/2025 16:47

I was not ignoring the PP @BitOutOfPractice , I was responding to your post where you brought up the Nordic nations.

And reading back, BitOutOfPractice did state "I’m not jealous or ignorant. ". I see no contempt, just mention of a small violin.

Where you say this above, quote " Dressing up contempt for productive people as ‘sympathy for starving children’ isn’t virtue. It’s posturing.". I see no contempt or posturing. I do think funding funding food for kids is virtuous though.

The only mention of contempt I see is what you said. " I save my contempt for the people who hand out sympathy and cheques just to keep people stuck where they are. "

I am pointing out that the Nordic model is one of very high tax and big cheques. I don't know if the Nordics hand out sympathy as well, but as another poster pointed out, they do top the tables on happiness metrics.

My reply was not a lazy Gotcha. I spent a fair bit of time on that reply, finding links and basic fact checking to make sure what I posted was true, so far as I could ascertain.

I have no idea if Nordic countries have "passive dependency. But a quick net search does shows Norway long term unemployed at 0.6%. Finland has overall unemployment of 8.9%, cant find longterm, but Nodic Times says it has risen 20% ( from what no idea), Denmark 2.5% total I can't find long term data. Sweeden unemployment 10.4%, with 173,000 people long term unemployed.

Sorry for the mixed up data, most of the web is blocked where I am. So I have to do this the old fashioned way.

UK long term unemployment rate is 1.97%, but that is old data up to 2020.

So yes, certainly in the case of Norway they have less long term unemployed. Much less than the UK for sure. From the data I can find.

They also have much higher tax and much bigger cheques. They have to fund their proactive measures somehow.

So the UK needs to raise it's tax, and public spending if it wants to match Norway ?

Perhaps you can present data that lower tax regimes can get Norwegian levels of long term unemployment.

I think you have me mixed to with another poster!

Original poster

NorthXNorthWest · 01/12/2025 18:27

Peridoteage · 01/12/2025 15:55

Wealth taxes are ideal though, as they good for preventing too much wealth accumulating in the hands of too few people.

This is exactly what has happened in the last 10 years - wealth has consolidated into the hands of shrinking pool of global elites, and its why we all just feel poorer. The share of global wealth that most ordinary people are sharing has become smaller.

Agree. Wealth taxes are necessary. But an individual or family whose only asset is a home worth £2m is not part of the global elite. If the issue is them tying up home or unearned wealth etc There must be better mechanisms than the mansion tax.

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Kleeneze · 01/12/2025 17:39

NorthXNorthWest · 01/12/2025 17:27

Yes, the Nordics show high tax can work, if it delivers genuinely good public services and everyone who can is pulling their weight.

Labour seem to want high taxes to fund an ever-expanding, politically protected welfare state, from a position of no growth. It’s economically unsustainable.

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whilst actively blocking the highest earners from accessing services they pay for - childcare. It’s a totally bonkers stance.

BlaBlaWhatever · 01/12/2025 17:39

schoolfriend · 29/11/2025 10:48

There are no principals of taxation. Democratically elected governments can tax what they like.

Yup. The Romans actually taxed urine.

https://en.wikipedia.org/wiki/Pecunia_non_olet

So if you think this government is taking the piss.......

Pecunia non olet - Wikipedia

https://en.wikipedia.org/wiki/Pecunia_non_olet

Original poster

NorthXNorthWest · 01/12/2025 17:27

Kleeneze · 01/12/2025 16:59

Having lived and worked in two of ‘the Nordic’s’ for a number of years there are key differences between our countries.

Benefits for those who have been in work reflect the salary they earned when they were in work. In Sweden you get 80% of your salary as benefits when you are made redundant and that’s lasts for 2 years. Pay in get out. Childcare is pretty much free. Pay in, get out. People work because that’s what’s expected of society. You work and pay taxes to get good public services. People who refuse to work - even stay ant home mums - are very much looked down on. Benefits for those who don’t work are the bare minimum. Taxes on higher earners are similar to those we have here. Taxes on those who earn less are far higher than our basic rate of tax and the personal allowance is minimal. Higher tax payers would see barely any difference to the tax they pay but would get access to far more for that tax. Those on lower incomes would think the income tax rates eye watering.

This system would never work here but always find it so surprising how many lefties think Scandinavia would be a great place to live. It is, but only for those that are prepared to work hard and pay tax.

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Yes, the Nordics show high tax can work, if it delivers genuinely good public services and everyone who can is pulling their weight.

Labour seem to want high taxes to fund an ever-expanding, politically protected welfare state, from a position of no growth. It’s economically unsustainable.

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Original poster

NorthXNorthWest · 01/12/2025 17:16