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

[lesley33]

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

In cash - maybe? Depends I guess on other assets. But tbh to answer that question I would look at stats and the net worth of average person in UK. I find as people tend to socialise with people of similar incomes, personal experience is rarely accurate imo.

Sorry AKiss must've missed it.

I think it makes you pretty well off!!

The disposable income thing is a bit daft. If you are choosing to spend £10 000 of your £11 000 income on a mortgage, you are still spending £10 000 a month - and you have to be pretty well off to be able to do that.

If someone were spending that on shoes, you'd think they were stupid rich.

If anybody is spending that 90% of their income on their mortgage, they have got more money than sense, that's for sure.

You know what...I might 'own' a house worth that but I have a hefty mortgage which I pay for out of income I am already paying 51% plus marginal tax rate on (taking account of child benefit, pension tax relief etc I lose); I pay childcare; I pay school fees; I use relatively little of the state provision for things like education and healthcare; so actually I feel bloody poor and like I contribute a lot.

Yes I have an income I know many would dream of, but I have just had to cancel my daily paper and cut my kids pocket money - just like many others the recession is hitting me, and the huge increase in tax I pay I have had to find from somewhere.

So I have no idea how I would pay a property tax on top of the huge increase in taxes I have already been paying over the last few years.

You might feel poor, because of how you choose to spend your income that may would dream of (expensive house, private schools), but you are not.

True TheFallenMadonna, but you wouldn't be potentially in negative equity on a pair of shoes and unable to sell them at a profit would you?

Depends, I suppose, on what kind of shoes you buy.

If you are struggling to pay a silly mortgage on a house that is worth £2 million but on which you owe £3 million, then you aren't rich, no. You are in serious trouble.

Quite different if you are paying your martgage and increasing (albeit slowly!!) your equity.

YANBU. It's disingenous to pretend that squirrelling away one's money into the long-term investment of a large property is the same as not having it in the first place.

YANBU. It's disingenous to pretend that squirrelling away one's money into the long-term investment of a large property is the same as not having it in the first place.

That.

Many of these posts seem to miss the simple point that, whether people are loaded or not, is relevant to whether it's fair.

People who are relatively rich have just as much right to expect consideration on what's fair for them by their government as poor people do from their government. This country should be a nice and worthwhile place to live for everyone, rich or poor.

Is *not relevant. Oops

The question in the thread title has nothing to do with fairness. And, TBH, neither do many of the posts.

"squirrelling away one's money into the long-term investment of a large property"

This suggests that all those who live in a house which is currently expensive actually ever had that money in any other form. It's simply not true. We are not in that price bracket, but we would be unable to pay for our house if we were trying to buy at at the price that others on our street go for now.

It is a common phenomenon arising from how house prices in UK surge from time to time; and it means that you cannot make any assumptions about the wealth of the occupants of properties. It is, I think, a form of demonisation to encourage this "get the 'rich'", and one I am uneasy about as there's far too many examples across different sectors of society (eg look at Brown's worst 50,000).

I had hoped that the end of the Labour years might have mean the end of demonisation and "style over substance", but all the evidence is now piling up to the contrary.

People who are relatively rich have just as much right to expect consideration on what's fair for them by their government as poor people do from their government. This country should be a nice and worthwhile place to live for everyone, rich or poor

But that is the issue, it is an extremely nice place for the rich as they are avoiding paying tax and stamp duty via vehicles not open to the less well off, and income is not the biggest proportion of their wealth - most of it is from the increase in value of rare assets that they own. To those that have, morse is being given.

The Mansion Tax is a way of taxing non-hideable wealth, rather than under recovering on income.

This country is a nice place for the poor too! We all get free at the point of use healthcare, education for our children, and if your wage doesn't give you enough to live on, the government will top it up for you in the form of taxcredits. If you can't afford to house yourself you get housing benefit, if you don't have a job you get JSA, there are loads of benefits out there for poor people, and that wouldnt be possible without the rich paying the tax they already do.

Someone has just posted the story 'How the tax system works' on another thread. It makes a lot of sense.

This country is a nice place for the poor too!

Right re the poor, so guess who is getting squeezed. And guess who have a lot of votes. And you can't just wring some money out the poor in benefit cut, you have to go after the rich because that's where the money is.

And it is completely disingenuous to argue that ownership of a £2m asset is not owning a lot of wealth.

I don't think anyone is saying that people who own £2m hoses don't own a lot of wealth. They are just saying there are situations where people who do own £2m houses don't neccesarily have the income to match, and will not neccesarily have the money to be able to afford that tax.

I think if I were in the situation where I was going to be expected to pay that much tax, I'd sell my £2m house and buy something smaller here then buy something else in another country. Which would lead to me spending more time in another country and therefore spending less money here. Or I'd sell my mansion and put the money into trust funds for my children or grandchildren in the hope that I can reduce their inheritance tax bill.

Otherwise you'd be expecting me to pay tax on my mansion when I bought it, high tax on my income as I earned it, tax on my house just because I live in it, and that would be in addition to the higher rate of council tax I already pay, then you would want my children to pay tax on my house when I die. I'd be thinking that I already pay enough, especially as I don't use the education system and use little of the healthcare system, and have paid into a private pension so I'm not taking out there either.

Introducing taxes that people perceive to be unfair, whether some people think they are fair or not, just encourages the biggest contributors to become more imaginative when it comes to avoiding paying tax.

If you owned the property outright, sure. If it's heavily mortgaged, and you are effectively renting it from the bank, then no. The proof of the pudding is what happens when you sell - do you actually emerge with the profit in your bank account, or do you hand it straight back to the bank? Then again, you need a fairly hefty salary to borrow that kind of money in the first place, so yes and no...

I don't think anyone is saying that people who own £2m hoses don't own a lot of wealth. They are just saying there are situations where people who do own £2m houses don't neccesarily have the income to match, and will not neccesarily have the money to be able to afford that tax.

There is no way on earth you can believably argue that someone sitting on £2m of assets can't pay a tax worth pennies on that.

I think if I were in the situation where I was going to be expected to pay that much tax, I'd sell my £2m house and buy something smaller here then buy something else in another country.

Great - that's 2 houses bought, instant stamp duty boost. that's more than they'd squeeze out of you any other way.

Introducing taxes that people perceive to be unfair, whether some people think they are fair or not, just encourages the biggest contributors to become more imaginative when it comes to avoiding paying tax.

The last 20 years or so have been a marvellous time to be very rich in Britain and the US, the % of the wealth owned by the top few % has increased massively while the tax take on them has fallen. A mansion tax or similar falls well short of getting to EU levels of tax on the weakthy. Those that bailed out the financial system are by and large those who did not benefit from it before, nor after.

I think you will find that most people perceive that to be unfair, whether those sitting with the wealth think it fair or not.

It doesn't necessarily make you rich. They could have bought the property years ago when it was worth significantly less and the cost of housing was a smaller % of income. They could have since lost jobs, taken a drop in income, be comfortable but not necessarily rich.

It's unfair if someone has worked, paid tax, that they are going to be taxed yet again on the property they've bought with their post tax income. They'll already pay a higher council tax than the less expensive homes in comparable areas.

Personally I think the only fair tax is a tax on income. Governments only come up with these increasingly convuluted ideas for alternative methods because they're too scared to put up income tax.

Whatmeworry, did you miss the bit where I said I'd buy something smaller in this country and something elsewhere? That would mean only one lot of stamp duty in this country, as well as less council tax and less money being spent generally out of my pocket.

You don't seem to want to admit it, but it's a fact that there will be people living in houses worth £2m that really can't afford to pay an extra yearly tax. People that have contributed to the system for a long time, found themsleves with a house worth more than they ever thought it would be, and have now retired on a private pension, that doesn't stretch to paying out even more.

There seems to be an attitude of 'if they have x they must be able to afford y, and I'm not prepared to be told any different no matter how true it is'. It simply doesn't work like that.

I'm not given to evil curses, but I hope those people who say 'Oh I hardly use the doctor' will be denied treatment when they are old. That or die before they use years of medical care on the backs of the rest of us.

Such utter BS on this thread, some people claiming that if they are spending all of their £150,000 salary that makes them poor. the point is that most people don't have any choice in what they spend on - people on that amount of income do, and if they can't manage their money on that amount, well I'm not sure they really deserve the money.

Any household who has an income over £40K is in the top 10% of earners in the country. If you are struggling above that level, make some sensible choices and downsize somehow, don't winge to the majority that you deserve more ffs!

This thread just shows the self-delusion of higher earners.

for the record if you 'accidentally' buy a house years ago and its now worth £2million, then you have made a lot of money - please don't say that we are expected not to notice! Wealthy people seem to think that poorer people are too stupid to understand their wealth... piss off, honestly.