We live in South West London. We bought a run down 1930's 3 bedroom semi detached house in 2017 for £550k. It wasn't really fit for human habitation, but we lived in the hovel for two years because we couldn't afford to improve it.
When our eldest son was born in 2019 we got a new central heating system, new double glazing at the front, had it replastered, fixed some leaks that we hadn't even been aware of and DIY fitted an IKEA kitchen.
We've just completed extensive building work and it's now a 220m² six bedroom, four bathroom house. The building work was paid for from savings and additional mortgage borrowing. I think it's probably now worth around £1.2 million.
We're currently under the mansion tax threshold, but for how long? I doubt our £3,300 per month mortgage will be paid off before we're pulled into it - but apparently it doesn't even matter if your equity is below the threshold. 🙄
Thinking about the bigger picture, what will this do to the building trade? If somebody owned a similar semi-detached house in a more expensive area (e.g. worth £1.2 million pre-extension), they'd be stupid to maximise their property like we've done. It would push them into the claws of the envy driven arseholes that support this unfair tax.
As for all the people advocating a Land Value Tax, how would it cope with gardens? The planning rules prevent people building additional homes on their gardens, so the land is basically worthless - but I expect they'll want to tax it as if it's prime development land.