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

People expect that all the time of poorer people.

Iggly, yes exactly. It would be a difficult decision no matter what their income/property value.

I certainly know several self employed people who wouldn't ordinarily be higher rate taxpayers anyway, but who pay as little as 10% in income tax because the law allows it.

that is because they have already paid corporation tax on their profits between 20-25% depending on the size of company.

so someone paying 10% income tax is acutally paying at least 30% (you dont get any allowances on company profits so pay tax on the whole pot that a SB owner uses for their income.)

My point was that I'm not feeling sorry for someone with a £2mn asset who has to move because, quite frankly, they'll be in a much stronger position than someone without.

Wasabi, not all profit is taxable - you can use previous losses and tax deductible expenditure to reduce your taxable position.

I know 3 sets of people with a £2m house.

Two sets are extremely - money no object kind of wealth.

The third set have a combined household income of around £100k. They come from very poor backgrounds so have no inherited wealth. They have always believed that to ensure that they are provided for in old age, they should ensure that they stretch themselves to buy the biggest house they can. They have done this and so have made huge incremental gains in the 90s and 00s when property prices were rising fast. Their house is their main asset and intended to be sold when they retire - they do not have significant other pension income. They are not wealthy and should not be subject to a ludicrous rate of tax because of the way they have chosen to invest their money. They would have no means to meet the tax.

Tax the rich based on income and ability to pay.

That should be "Two sets are extremely wealthy".

they seem reasonable to me - when do you think they would not be reasonalbe?

Iggly they seem reasonable to me - when do you think they would not be reasonalbe?

Oh I don't think it's unreasonable at all, just pointing out that there are ways of reducing tax as a business.

Iggly - i would rather not incur 100% the loss to save the 20% tax on profits & the only people i know hike business costs to save tax are spending 100% to save 20%....

DC's music teacher lives in a house that her DH inherited. I reckon it is worth about £1.7 million. Its not a mansion but it has great views and it is near some good schools, both state and indie, so the property attracts a healthy premium.

DH is a BT engineer and she teaches music. Hardly rich.

Oh no I didn't mean people would do that! I just meant there are allowances for people in business.

Two sets are extremely wealthy - money no object kind of wealth.

The third set have a combined household income of around £100k. They come from very poor backgrounds so have no inherited wealth. They have always believed that to ensure that they are provided for in old age, they should ensure that they stretch themselves to buy the biggest house they can.

Ironically, the 3rd set are probably net more wealthy than the first 2 who are probably paying off mahoosive mortgages.

But there is still no way you can argue thats someone sitting in an £2m house is not wealthy. In fact they will be far better off than any contemporaris who scrimped and saved and put money into pensions.

As someone said earlier, sinking money into a big pile and pleading poverty is akin to sticking all yoir money in a long term saving account and then saying you are skint.

Pushed

Isn't the point though that they are rich, not because of their income, but because of their assets

Bennifer - Too a person from India or China you are rich in assets but does that make you 'rich'?

Anyway, why the fixation on the term? Seems like a another way of sticking a label on someone so that we can have a Them and Us bun fight.

I have a City friend who lives in a £1.75 million house. I think of him as someone who lives in a big house as opposed to someone who is 'rich'. For 'rich' I look to people like footballers and the like.

Whatme - I doubt the first 2 have mortgages of any kind. They are genuinely very wealthy.

The thrid set have scrimped and saved, but in their case to pay off a massive mortgage (which they still have), which was deliberately the largest they could afford. They will have paid off the mortgage by the time they retire and will then sell the house and fund their retirement income out of the proceeds of sale. I genuinely do not think it is appropriate to tax their method of saving when other people with comparable pension funds will not be taxed, and indeed, receive substantial tax reliefs (at leant until weds).

Wealth is very much relative. I am wealthy compared to someone in India, and yes, when I travelled to Bangladesh last year, I did feel rich. Someone in a £2m house in the UK (unless there are some strange circumstances) is rich, as it puts them in the top tier of wealth. No need for a bunfight, just stating the obvious.

That's all the OP asked

I'm not trying to start a bun fight either. I just don't understand the fixation.

One only need to pick up a newspaper to read some story about x who murdered his wife at their £500,000 house.

Or

x, a £80k pa company director, was arrested while bombing down the M1 at 100mph.

That's the Daily Mail isn't it?

Anyway, I agree it shouldn't be a fixation in a salacious way, but many people would agree that large inequalities in wealth are a bad thing, and is at the very least correlated with social problems. That's a whole other debate, although I could point you in the direction of this book

www.equalitytrust.org.uk/resource/the-spirit-level

The average price of a house where we live is £1,619,852 the highest just sold for £15 mil and the lowest is around £500,000

I don?t really think about whether we are rich or not yes we can afford nice things but that comes at a price my children don?t get to see their DD as much as other children because he is always working. Friends are hard to find because people that have money are so materialistic (we are not into that at all) and friends that don?t have much money always say ?well it?s ok for you?.? Or use us to pay for night out etc
The things that really make us happy are all free going for long walks, playing games with the children, visiting Museums etc

"Friends are hard to find because people that have money are so materialistic (we are not into that at all"

:o :o I just love it when people generalise. Moneyed people, apart from your good self, are all so materialistic. :o

Joan Bakewell actually needs shooting IMHO. She was all gung-ho with other people's money, til the thought the mansion tax might actually affect her ocurred to her.

A £2million house is only worth that if someone else is willing to buy it at that price. After which you wouldn't be living in it any longer.

I meant the people we know with money