AIBU to think a £2m homeowner should pay mansion tax?

The Government estimates there are 160000 non council houses worth 2 million or more to tax with the new mansion tax.
About 27 million properties in total subject to council tax.
And google thinks around 110 council houses in the entire country worth 2 million or more (0.0004 per cent)
So hardly a big story.

I think pretty lucky to be in the top 0.6% of property value and pay mansion tax. Can understand why people who paid a lot of stamp duty recently though are annoyed to be hit again.

The issue for government is more whether mansion tax will raise more than the value destruction caused by the tax and consequential loss in stamp duty revenue. I don’t see the point of taxes that raise less overall just to make a political statement. It seems to me successive governments are using taxes to point score now rather than raise revenue and that is just madness.

I just can’t grasp why people should have to sell their home to release the equity. So an example is

My Nan lives in a standard 3 bedroom dormer bungalow. Worth approx £140,000 now, she bought it in the 60’s for £4000 so in theory has made £136,000 due to house prices rising, so going off peoples assumptions here she has that in her bank account- except she doesn’t. She lives off her state pension and her small occupational pension from when she worked as a care assistant in a day centre for the local authority.

So now we decide we tax her and she will have to sell to release the equity. However she still needs somewhere to live, shes in her 80s but lives independently due to the fact her 2 children, 4 sets of grandchildren and also x2 great grandchildren (late teens) all live on the same large housing estate. Now there are 20 bungalows on the estate but they actually sell for more than the dormers due to demand about £155/160 and she has downstairs living in her current home so she doesn’t actually need to downsize in that respect. The other alternative is she moves to a ‘cheaper’ area to downsize which would maybe be £110-£120k for a bungalow leaving 10-20k in equity. But also in the process looses her support network and the move will probably finish her off.

Yes shes not in mansion tax territory but the principal is the same, for people who bought and have made money its not in their actual pockets and house prices have gone up so for elderly to stay in their area probably with their current support network they probably aren’t going to end up with that much cash left over anyway.

The reality is is my Nan is probably never going to see that 136,000 as she will either need it to pay for a care home , or she will pass away in her current home in which case it will be released when the house is sold at the point. But she won’t benefit from it in the way posters are making out.

Instead of making this about ways we can penalise people who have less, and don’t actually own the expensive property and therefore the asset - just make the tax fair.

If you own a £2m property, regardless of if you live in it, it’s £2.5k a year tax. The owners of those social houses pay it, the elderly chap we’re discussing here pays it, the many people a few miles from me in Prestbury pay it.

It is their home in all of those cases, but the owners of the asset pay the tax.

Unless you just don’t like HA tenants. Which is a different conversation.

I'm surprised the Telegraph hasn't done an article on social housing worth 2M - that sounds far more up their street than wealthy Tory living in one of the UK's most exclusive postcodes has been asked to pay 0.125% of his house value in tax! 😂

People need to live in social housing worth over £2 million. Why do they need this but private owners can just move to a cheaper area?

They don't need to if they have a lifetime tenancy. How many people would choose to own an asset with all the risks and cost of ownership if they could have the same house as SH with the security of a lifetime tenancy? I certainly would plump for this option if I was eligible

There are always a few scroungers, yes, but the majority of people who live in social housing and who are receiving benefits absolutely need to. Life circumstances can change in an instant, and it's important for a stable society to have that safety net. For all of us.

If you can afford to live in a house worth 2M you've experienced a rare level of privilege in your life - and contributing your fair share should be something you don't begrudge - in order to preserve that stable society.

Having said that - there is a huge amount of hidden wealth linked to the UK - both on and offshore - this is something that needs to be addressed with global tax laws.

They're social housing so people get non means tested lifetime tenancies on super expensive homes. This is worth up to £1.4 million and all at the expense of the tax payer. They never own the house though so aren't liable to the tax.

Lots of people claim lifetime tenancies shouldn't be means tested because otherwise these houses will never become people's homes if they know that if they earn over a certain amount they wouldn't be eligible anymore. Funny how this argument about houses becoming homes doesn't seem to apply to private home owners though isn't it? Those that actually finance the whole cost of living in these houses themselves rather than relying on the state

@Itchthescratch ”What about people in expensive social housing”

They don’t own the asset.

An easier solution surely would be that the owners of those properties pay the same tax on them that the elderly man does.

He literally says in the article that they have a pension and investments. He says they won't be left destitute by having to pay. So he doesn't have 2 million in cash but does have enough income via a pension to pay. It's fine if people still think it's unfair, but it's completely dishonest to pretend that he is forced with having to sell his house.

Ok, so using your logic, I would like to test how far it goes.

You seem pretty adamant that it's morally acceptable for the elderly man to be forced to pay this tax for no other reason than he privately owns an expensive house.

What about people in expensive social housing? They are costing the state an enormous amount of money by occupying homes worth so much and tying up public money in this way There are 110 council homes worth over £2 million. Surely these people should be forced to move and sell. In fact surely everyone in social homes over an even lower threshold should be forced to sell following the same logic. Maybe we should set the threshold at anywhere above the national average home value? Afterall you have no sympathy for people in expensive areas and think they can simply move to a cheaper area to liquidate their asset. Why doesn't this work with social housing?

But he has an asset he can realise. I dont need to go through the options again.

And if he doesnt want to have equity release then maybe his children can help him out?

My net worth is a lot under £2m (which is only his house value) My house is worth? 450k ish

My salary is 80k, and I dont tax avoid, so I am indeed paying with my money

I really don’t understand your analogy. He doesn’t physically have 2million since he is living in the home 🫠 yes his property may be worth that, but only once its sold - probably when he dies, therefore he doesn’t see that gain anyway.

Successive governments making terrible financial choices, spending money irresponsibly (see Covid..) and the huge national debt.

I would assume you knew that.

But if we’d like to focus on taking some of the burden off the broadest shoulders, surely the sensible place to start is by focussing on those who don’t carry any of the tax burden at all. Encourage them to get into work, share the load and start contributing at all.

Welfare first, if we must. But optionally unemployed next IMO.

Why do we need to "raise funds" if we already have a massive tax burden?

Candidly, it’s bigger than your share.

If we need to raise funds, why don’t we start with healthy and able adults who are able to work, and therefore contribute to the tax take, but choose not to.

All of those adults.

Ah yes their magical share which is always bigger than everyone's elses. What do you socialists do when you run out of other people's money?

Oh look - someone else on the "jealous" bandwagon

Newsflash - wanting someone to pay their share when they CLEARLY have the means to pay it is NOT jealousy. We are also not "mean girls" in case you were planning on using that next.

He doesn’t need to sell it, or are we expected to believe he’s surviving on a basic state pension?

It's what some people are like.

Wow how jealous of you, you’d see an elderly man sell his home so he could pay tax sooner, fuck me, that’s bad.

Not in my experience.

People earning well tend to make smart investments...