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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To think if you own a £2 million house you are rich?

218 replies

lesley33 · 18/03/2012 21:04

I guess I am just surprised at those who think you can own a £2 million house and not be rich. Only 0.5% of sales in 2010/11 were for houses worth £2 million or more. Link below. So if you own a house worth this you are in a small minority of the population.

Yes I know its possible to be asset rich and cash poor (although you could always sell your house?) But AIBU to think anyone who has a house that is worth £2 million or more in the UK is rich?

www.propertywire.com/news/europe/uk-property-tax-prime-201202236204.html

OP posts:
cantspel · 18/03/2012 21:49

The Crown Estate owns the castles, palaces and estates. Although in name it is the queens it is no longer her private property and cannot be sold by her, nor do the revenues from it belong to the monarch personally they are paid to the treasury.

Swed · 18/03/2012 21:50

Perhaps they'll axe Principal Private Residence Relief so that gains from housing are subject to Capital Gains Tax at the owner's/owners' marginal rate. It would be a pretty un-Tory thing to do but I see its merits.

bronze · 18/03/2012 21:50

Hand- thanks
that is pretty shit, doesn't give people a chance to pay it off in their own way

HandMadeTail · 18/03/2012 21:51

Yes, true cantspel but the fact that they are intact is due to the fact that no IHT was paid.

wherearemysocks · 18/03/2012 21:52

If someone has the deposit and the income to get a mortgage on a £2 million house is rich by pretty much any definition.

Quite DamnBamboo - obviously, 11k a month would be a HUGE amount of income to have. However, if you are paying 10k a month on your mortgage then you are no richer really than someone with a modest £1,500 a month income paying £500 on their mortgage.

Absolute rubbish. If someone is earning 10 times more than another then they are richer. How they chose to spend their money is up to them and if they wish to prioritise having a big house and so being left with little disposable income then that is their choice. They are still far richer than than the one with the lower income.

DamnBamboo · 18/03/2012 21:54

Lots of people who got royally fucking shafted with their pensions put their money into property so they've got something to retire on.

Why would you subject a home to CGT? Why?

Of course the tories won't do it, no goverment would do it.

LydiaWickham · 18/03/2012 21:54

HandMadeTail, can I ask a IHT question, if you inherit a property only with no money in the estate, but you could afford to pay the 40% out of your own savings, could you settle it to get the whole of the house or would you have to effectively buy it (therefore having to pay stamp duty, fees etc)?

cantspel · 18/03/2012 21:54

Of course but the reason why no iht is due is also down to the fact that they dont actally own them.

DamnBamboo · 18/03/2012 21:55

Wherearemysocks we've moved on from there.

Some of thought it was about being able to find spare money to pay a mansion tax; we've now learned that this is not what OP was getting at.

Of course if you can afford a £2 million house you are rich! I don't think anybody would disagree with that.

cantspel · 18/03/2012 21:56

no you wouldn't need to buy it as it is already yours. You just need to pay the iht due on it.

bugster · 18/03/2012 22:02

YANBU. Two million is still an awful lot of money for a house. You have to be rich. Of course it doesn't matter if you've chosen to tie up that income in the mortgage and don't have a lot of disposible income. People usually spend according to their income and many on a large income might not have much disposible income. But owners of 2 milion pound houses are rich.

bronze · 18/03/2012 22:06

Lydia- its what I was getting at. From what shes says its sold before you get a chance. Seems unfair to me

marriedinwhite · 18/03/2012 22:06

What of co-habiting elderly couples, perhaps elderly ones, where a partner has cared for another for many years (both perhaps having been married before and with children and nephews/nieces in the wings - who might not have visited for years). The home owner leaves the house to the partner for life but the plan goes awry because the estate passes to the beneficiaries who have to pay IHT and the partner who has done all the caring for perhpas a decade loses their roof?

It isn't as cut and dried as it appears.

Also we put down a deposit of about two thirds on our house in 1994. Our mortgage at the time was nearly 100k. We paid the mortgage from taxed income; we have paid for the renovations, we have continued to pay income tax at extremely high rates, we will have huge amounts of stamp duty to pay in due course, our children will have to pay IHT although we will make every effort to avoid this as far as legally possible because the tax has already been paid once. DH pays rafts of employer's NI, employs four or five people in his own right in a small professional business, has advised on many things that have helped the UK economy over the years. We do not participate in the education system for our dc although we have contributed, likewise the NHS.

If we earned less as a family we would also be paying much less tax. Last year we paid about £250k. I think we contribute hugely already. DH is at a stage in his career where we could relocate to another administration. We don't want to do that but if we have to pay more than we do already we will and the UK will ultimately be the loser.

The children will board and probably almost certainly then end up at university in the US. Double whammy all round. We contribute a huge amount and take out very little. Make it more punitive to us and we will contribute far less than we do at present.

OutragedAtThePriceOfFreddos · 18/03/2012 22:11

Only read the OP - of course having a £2m makes you rich. That doesn't have anything to do with whether you should pay mansion tax though, just in case that's what you were thinking of.

Swed · 18/03/2012 22:13

marriedinwhite - you only pay stamp duty on the purchase of a house.

HandMadeTail · 18/03/2012 22:13

bronze and Lydia yes you can pay it with your own funds, but not over time, which is what I thought you meant.

Bedtime for me now.

lesley33 · 18/03/2012 22:13

This thread has nothing to do with mansion tax or IHT.

OP posts:
DamnBamboo · 18/03/2012 22:15

This thread is pointless.

bronze · 18/03/2012 22:17

Thanks Hand

marriedinwhite · 18/03/2012 22:19

Swed depends how many you own - if more than one you pay CGT too Wink

Swed · 18/03/2012 22:22

marriedinwhite - but CGT isn't SDLT. In any case, haven't you heard of flipping? Wink

Popoozle · 18/03/2012 22:28

*"if you are paying 10k a month on your mortgage then you are no richer really than someone with a modest £1,500 a month income paying £500 on their mortgage."

Do you really believe that???

So someone with an income of £1,500 a month is noe better off than someone with an income of more than £10k a month. Yes they may have the same amount of disposable cash once bills are paid, but of course one is better of. People make choices about how tro spend their money.*

Not if the have no, or very little equity in the property. It depends how you count richness. I count it as what you would have if you sold all of your assets combined with your savings. Someone with no savings, spending 10k per month on a mortgage with no equity in the property and an income of 11k per month would not be rich to me. Of course they could sell the property, rent somewhere and have loads of money to save each month - but the point I was making is that simply having a £2m house does not necessarily make you rich at this moment!

DamnBamboo · 18/03/2012 22:28

Nobody answered my earlier question... if you have £400k, are you rich?

This is just as arbitrary a question at the OP.

Just wondering at what point you become rich.

AKissIsNotAContract · 18/03/2012 22:30

Damnbamboo: I answered it upthread.

FreudianSlipper · 18/03/2012 22:30

my friends parents always claim they are not rich

they are property rich cash poor

they really do live on a shoestring but have a huge house in wimbledon village, of course they are rich, very rich they just prefer to have a big house than have more money in their pocket and do not spend their money on frivilous things like new cars, lots of holidays, designer clothes (expensive well made clothes that last years)