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

what motivation does this proposed tax give anyone to buy their own homes

I’d say a profit of £1.985 million and no housing costs for several decades was quite strong motivation personally. Obviously the vast majority of houses aren’t worth over £2 million so there’s that as well.

There are various aspects to this, which need to be considered.
Firstly, was the house bought outright or with a mortgage with interest payments?
Secondly, a property is only "worth" what someone is willing to pay for it. I am unsure as to how a value of 2 million has been calculated over a 60 year period, given the vast fluctuations in both inflation and interest rates during that time.
Thirdly, what about upkeep, renovation and modernisation costs during that time, all of which probably came from taxed income?
Fourthly, what motivation does this proposed tax give anyone to buy their own homes and thus relieve pressure on the stretched rental market - both public and private?
Fifthly, even if someone of 90 was prepared/able to sell up and move, where would they find accommodation that is suitable for their needs?
Surely most people buy a house that suits their needs at the time, possibly with a bit of contingency for the future.
It seems to be a very peculiarly British expectation that you see your dwelling as an investment.
Finally, if there is any doubt, I am not in favour of the state imposing arbitrary taxes on its citizens. The state's duty, in my view, is to provide the minimum to maintain a civilised society, but give its citizens as much freedom as possible to make their own choices and provide for themselves as they see fit.

Exactly. Not that many companies would allow 80%, and if they do, they certainly expect the same 100% of the work delivered.

The thing with the mansion tax though one could argue it can also help some people indirectly. Take that house in Richmond linked by @pouletvous. If it sold for 1.8million in 2014 it has not had much increase in 12 years. And the mansion tax on a 2 million property is small in greater scheme of things, can actually keep prices lower and from rising at that level. The real killer is the stamp duty for higher end properties and that was the Tories. It is a complete sunk cost and arguably what has depressed the London property market/stabilised it in the last 10 years. Personally, as a London my preference is for prices to remain relatively stable over a long period of time. The real problem we have in London now is the depreciation of the pound and the fact that it is now so much cheaper for foreign buyers with stronger currencies. I think a lot of the double council taxes etc are aimed at a deterrent there. London needs to be for Londoners primarily living and working here majority of the year, not second homes for the international rich. They can use hotels.

It is not just that you lose the childcarer entitlement though is it. It is the fact that you often pay even more and subsidise those who do get it. Like with your taxes. So it changes the equation and future planning entirely. Instead of a professional couple eg staying in London and having 3 kids and buying a house on a huge mortgage initially, they can’t now. They may only have 1 or max 2 kids, they may move abroad, they may go elsewhere. Then those 2 professionals who were going to likely be top 5% taxpayers for 40 years translate to a huge loss to the treasury. And typically their kids were going to be taxpayers too etc.
If childcare is subsidised, subside it fully and make it universal for all. Not punishing a select few who the taxpayer pot actually relies on en masse.

Eh, small flats in London are worth 2m 🤣……

And that’s their choice. If people want to destroy their careers good luck to them. The fact remains that the childcare argument applies legitimately to a relatively very small number of people for a limited period of time. I’d be interested to see the figures for the impact it has on the Treasury.

This is what £2m gets you in Richmond

https://www.rightmove.co.uk/properties/88548618

4 bedrooms and 1800 sq ft

ahhh just a little old man’s house 🙄

There’s a misconception that small flats in London are worth £2m

incorrect! £2m buys you a lot of house. Even in London

pay up! Pay up pay up rich buggers

But it changes behaviour for longer with negative impacts for the government. Many people go to the equivalent of 3 or 4 days per week as they start to get close to the £100k threshold, particularly if they can’t compensate by paying extra into a pension (e.g doctors).

Childcare is the trigger, but in a stressful job, time
off can be more valuable than heavily taxed additional money so once people have taken the career hit of working reduced hours, they often don’t go back full time.

@Valpolichella if you’ve paid ‘mid 6 figures’ in stamp duty in the last 12 months, you must be absolutely caked in money, mid 6 figures would be somewhere more than £300k in my book.

what did you buy? Downton Abbey?

that’s irrelevant though and doesn’t change that the top 10% pay a disproportionally large amount of the tax revenue.

It’s not irrelevant. The lowest paid pay a disproportionate amount of their incomes in tax. Obviously the most highly paid pay the largest amount of income tax, that’s the entire premise on which it’s based. The childcare argument is such a red herring, it affects a tiny proportion of people for a relatively short period of time.

OK apologies I misread as it’s relevant to the point I was making.

of course it’s going to be a higher proportion of their income as relatively fixed costs will take up a proportion.

that’s irrelevant though and doesn’t change that the top 10% pay a disproportionally large amount of the tax revenue.

the UK is known as being a low tax regime for lower earners and burdensomely high tax regime for higher earners. Features such as the £100 childcare cliff edge and loss of personal allowance which create a marginal tax rate off >60% at this point are unique and known to be counter productive.

it also doesn’t make sense on a local level. In no scenario would someone paying more than half the bill be so heavily critiqued and pursued to pay more yet that’s exactly what we do in this country.

the sense of entitlement many have towards other peoples money is unreal.

Where have you got £15m from??

Well by that reasoning a lot of the central London flats that fall within the tax should be carved out….given the small footprint, that is correct based on your reasoning?

possibly even less, my quick google says £3k was average 60 years ago, so his house was worth 5x average
average today is around £270k, x 5 is £1.35m
so today's £15m gaff would be a £1.35m place in 1960
Ok, stretching it a bit because lots of other factors/variables have changed since then... but £15million is still a lot of house!

He has benefited from property price rises, and yes he is rich. He is rich because property price rises mean he is worth at least £15 million, or does that not count as rich?!

If you've got a bigger property (as in the footprint rather than how many floors), then you will be using more public services than a smaller house (or even better an apartment). The more dense a population, the more efficient it is to serve them.

£15k was a lot of money for a house in 1968. The average house was worth about £4k.

2,100 sq ft? That's massive inside! Certainly a long way from (three times the size of) the "tiny Victorian terrace" someone claimed would cost £2m, even if it's not Highclere Castle.

Sorry, but I genuinely don’t believe that. My DH pays 50% of his income on taxes (income, council taxes, stamp duty which was recently nearly 6 figures) before all the other taxes you mention. We have paid VAT on two cars, holidays, legal/conveyancing fees, builders/trades persons, dog walkers, goods, furniture etc, because we have more disposable income and thus put more back into the the economy where VAT is chargeable. You mention insurance [not VATable or subj to tax, though]: our premiums are substantially higher than those on lower incomes due to the higher rebuild costs of our homes and the higher compensation required for the contents; same for the cars because they are £50-70k cars. We pay two lots of council tax (in total about £10k pa due to the second property premium) etc.

NB not complaining, it is what it is and we are privileged to be in the position we are due to DH’s choice of profession and his willingness to work pretty much every waking hour to support our lives.

It's fun watching the lives of the wealthy in Eastenders. Imagine what Dot Cotton's house must be worth.

That’s what I said.

Proportionally people on low incomes pay more of those incomes on taxes like VAT, insurance tax, council tax, and the myriad of other regressive taxes that fall outside income tax.

Totally agree.

Agree with you, 50 k is far from rich, about as far as 100 k is from being wealthy.

This country is a joke.