to think the idea of a mansion tax just penalises London and the south

[Redpipe]

I will probably get flamed for saying this but I don't believe that owning a 2 million pound house automatically makes you rich. Certainly in London a 2 million will not buy you a mansion, more like a terraced family home.

AIBU to think that the idea just penalises people in the south?

I was going to write tough luck but anyone who has 2 million pounds at their disposal is very lucky.

Sell your house and see your friend in the pub once a week, invite them to your new lovely home for tea and cake.

Don't make a face about the expectation of that, it's not a hardship. People are skipping meals to feed their children.

2 million? Again.

Fuck off.

2bar terraced houses are only common in the most kerching parts of town - get real. Hampstead, Kensington, primrose hill, notting hill, Chelsea and Knightsbridge are not representative of London. Plenty of nice areas exist that are not so stupidly priced: hammersmith, islington, Camden, greenwich, blackheath where we all manage to plod along in our sensibly priced houses without worrying about mansion tax. Linking to an ex council house in nw3 or a marylebone pied a terre is disingenuous

only on MN can someone think because you own a £2m house your not rich - you are rich, obscenely rich in fact - you choose to live in a house that is worth that much money - no one forces you to live there.

I can see no moral justification for this tax. The value of a persons home is irrelevant.

Many old people will have bought their houses for 2 or 3k and paid their mortgage off thirty years ago. They are struggling to make ends meet but their houses have gone up in value due to their location. You then tax them out of their home, which is sold to some one rich enough to pay the tax.

I suspect a lot of people in London are still paying high mortgages on their houses, then the prices go up and suddenly they have a "mansion" and need to find as much again, while still paying the mortgage.

Maybe people should pay mansion taxes for square feet instead, as that is a better measure of where the truly wealthy live.

If you are struggling in a £2M house, you sell the house.

And £2M is still alot of money even in 'that London'

It's a bit silly to just say that someone should sell their house to raise the funds for a tax related to the house that they are told about AFTER THEY BUY THE HOUSE. So they have to pay a mansion tax, and then buy another house and pay another stamp duty?

Being the owner of a 2M house in London does not make you "obscenely rich".

I would like to know what war this pensioner lost his eye in. If he is 80 then he was born in 1933 and would have been 12 at the end of WW2.

So either this neighbour is a liar or the OP was deliberately exaggerating or implying things lying about his circumstace to get done sympathy for this frankly ludicrous situation.

Some sympathy. Damn phone.

There were lots of bombs going off in London when he was 12. I don't see how it's implausible that he lost an eye.

But that's neither here nor there.

I don't agree that it's fair to pay a mansion tax in London because you get more in London than you you in the Welsh Valleys. That's what council tax is for, and although I have done no research on this whatsoever, I'd guess that council tax is much higher in London than it is in Wales. Also, the transport mentioned doesn't come free. If people want to use it they have to pay for it, and it's not cheap.

Change the council tax bands, or charge more stamp duty when buying a £2m property, but don't start charging it just because house prices have gone crazy.

Lots of people are asset rich and cash poor, and while I'm not saying that people should break out the violins in sympathy with those who have homes which have gone up massively in value, I do think that some posters need to be a bit more open minded.

Many people who are owners of expensive homes are no better off with their day to day spending than people who have secure social housing tenancies, except they have to pay for maintenance on their home instead of it being down to the council or HA.

People are still people, and I don't see why it's ok to post that you couldn't give a fuck about people who live in expensive homes without being jumped on any more than it's ok to post that you couldn't give a fuck about people who live in social housing.

coraltoes - plenty of 'ordinary' people live in the areas you mention too.

Areas like Hackney, Islington, Clapham, Hammersmith, Shepherd's Bush are also ridiculously expensive. There are terraced houses going for £1million in Peckham now.

I'm in favour of it or rather a wealth tax.

Most people who have million pound "mansions" paid peanuts for them years ago and they have appreciated in value through sheer luck, not through hard work. Meanwhile people earning peanuts doing long hours at work are being caught in the 40% tax band earlier and earlier. We should be taxing unearned income/wealth rather than taxing earned income as it just disincentivises hard work. This is also the reason why we have such a damaging property bubble, because people buy homes as speculative assets, keeping them empty and hoarding them pricing first time buyers and the younger generation out of home ownership and forcing them into either a life of renting from Rachman landlords who bought up loads of properties cheaply in the 80s and 90s or having to pay hundreds of thousands for a tiny flat.

It is about time the onus of taxation moved to unearned wealth and away from work. I am actually in favour of a land value tax but that is a whole other argument.

I just checked council tax rates for top-band properties in Kensington & Chelsea, in Manchester, and in the Vale of Glamorgan.
RBK&C £2153
Mcr. £2654
Barry. £2837
Wick. £2742

People in South Wales are paying considerably more council tax than those in Kensington and Chelsea.
I chose the most and least expensive rates from the vale of Glamorgan to show the range, but even Wick (the cheapest) is far above K&C.
I chose Manchester as a control group, a place that has good infrastructure and transport links but isn't London.
Assuming a fictional Kensington terrace squeaks over the £2M mark, it'd have to go over by £60k before the "mansion tax" made up for the difference in council tax, even between K&C and the cheapest VoG council.
Does that help?

Ophelia - do you not think that having to forfeit a home that you spent years doing up will also disincentivize hard work?

The whole tax system needs to be rethought. For example, giving tax breaks to buy to let property owners, I mean ffs why not give it to first time buyers rather than people who already have more than one property!

Nancy66, no I don't. I think telling the younger generation that they will not get free education but a life of debt, that they will not get generous pensions and that they will have to pay 10 x their salary to buy a small flat in a decent area of London or pay the mortgages of those who already own a home, whilst those that live in "mansions" are still entitled to free bus passes, winter fuel allowance, free tv licences, earlier pension ages disincentivises hard work.

Being the owner of a 2M house in London does not make you "obscenely rich".

It sort of does two million pounds in property makes you rich I dont care if they bought it in the 1800s and it has been the family home for all that time a person is sitting on two million pounds,

The rich do pay into the system. Those who have bought a house now valued over the threshold will have paid income tax on the money they used to buy their property and will have paid stamp duty on the purchase. If they have done improvements that have augmented the value of their property, taking it above the threshold, they will have paid VAT on those improvements. And self employed builders who have worked on the project will have paid income tax on the earnings they made from the project. They have already paid tax on their property. Why should they, and they alone, have to pay an additional tax, for each year that they own this property?

To everyone who says 'just sell', this tax could well create unsaleable properties. Who is going to take on a £2 million house when they know they will have to foot a hefty bill each year of ownership? Those for whom this tax is truly irrelevant from a financial point of view, are more likely to be those buying at even higher prices. So you will have a band of properties, including those that are currently valued below the threshold, that are effectively unsaleable.

I think some of the problem is that people think houses = money.

If you can sell your house and buy a comparable one in the same area for less, then yes - you have disposable income.

If however, you can sell your 3 bed semi in Clapham and only afford to buy a 3 bed semi in Clapham with the proceeds then you don't profit and thus don't have disposable income.

We bought our house for 80k, it's now worth 180k - I don't have twice as much money, we still have the same car, our lifestyle hasn't changed - it's monopoly money & doesn't bear any resemblance to real life.

Some people are saying "move away then" - why? If you start taxing the poor out of certain areas then you start to create "ghettos" where only the poor live. "Financial Cleansing" of desirable areas is not the way forwards surely?

Rather than taxing those who live in an area that has suddenly become "fashionable" why not make it illegal to give a mortgage for more than 3 x income? Tax the shite out of second homes that are let, tax the shite out of holiday homes. Until more people have 1 home, why should some people have 2? That makes more sense to me.

If no one can afford to buy a house at stupid prices because they're limited to 3 x their wage them maybe overall house prices will drop. Before people start crying about "negative equity" - that only applies if you sell your house. If more people lived in their houses instead of seeing them as "get rich quick" schemes things would be tidier all round.

There are bin men, cleaners & all sorts of public sector workers living in "mansions" in London - they're not rich, they just happened to be born there!!

on the one hand, there are a lot of older people who have benefitted from the huge rise in property values (along with other benefits such as family allowance for all, jobs for all, free university education, final salary pensions etc etc), and tbh my 'sympathy' is fast running out - hate to say it but pensioners are the biggest group in recipient of benefits and certainly a good number of the pensioners I know do not need all, if any, of those benefits (most are desperately justifying why they should hang on to them though!).

But, it is true to say that in certain parts of London 2 million is not buying you a mansion, it's buying you a 3 bed terrace. And yes, that pensioner could sell up to avoid paying this and increase his income anyway. But, almost certainly, he would have to move away from the area he may have lived in for years, and I do think that is sad (for any older person of any income) - I can imagine it being very disorientating for an older person to have to start again in a new, perhaps not such nice, area in their 70s or 80s. I also think that it is good if an older person can have a spare room, for children/grandchildren to stay in (which is why I think the bedroom tax isn't great either).

I don't know what the solution is for your neighbour but looking forward I guess the thing is to make your own plans while you can rather than being pushed into them by the tax man.

People talking about how much tax the man will have paid from earning enough etc to afford a £2 million house are not taking previous levels of inflation into account. People are talking about house prices doubling in the last few years but my parents bought their property in the late 80's and it's now worth 6x the price they paid. They are not paying a mortgage on the increase nor stamp duty, because the property has increased their tax bill hasn't but everyone who isn't in their position ie trying to buy now is paying for the increase. Higher mortgages, higher stamp duty why should one person have to pay because house prices have increased but another person not? If that money was sat in savings and the increase was due to interest how much tax would then be paid?

With regards to selling and having to buy a comparable property why? My parents want to downsize, they don't want or need a big family home any more. They are fit and active now but appreciate they may not always be so want to buy an easier to manage property niw and get it how they want it while they can.

I assume the mansion tax will be similarly valued to the council tax so once set its set till a big upheaval and they are all reassesed. It wouldn't surprise me if they use the valuation for council tax but reasses those at the same time so most people would be affected by higher banding too. The government won't miss that trick.

SugarSpunSisters -"I would like to know what war this pensioner lost his eye in. If he is 80 then he was born in 1933 and would have been 12 at the end of WW2."

We've had a few since that one you know, ironically one of them is known as the "Forgotten War". Just because &you don't know something, it doesn't automatically mean someone is lying...

Completely with MrsCB and Ophelia on this.
We have had a change of fortune recently and are purchasing a much larger property than we are in at the moment. We fully expect to move when the children are older and left the nest. To release capital and enjoy retirement. We are planning for it.
That is exactly what the current vendors are doing.