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 think taxing property is the way forward. There are many low and middle earners who cannot escape income tax and there are many in this bracket who cannot afford to buy their own modest home and are stuck with renting. I think the government should go even further and tax people heavily who have a total property empire of 2 million. This might free up more properties for first time buyers.

Sugarspunsisters
I wrote.....
The prices have really only gone absolutely crazy in the last 6 years. Some of these people were 80 years old then, not exactly the age to say "right have you seen the price of our property now, lets move." at say 86!!

So why did you write
"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."

Perhaps you should properly read my posts before you jump on me. I neither said my neighbour or that he is 80.

Sorry, not read all the posts but I agree with the OP. High earners are already taxed 45% on their earnings to support others. Why, if they have saved in the form of a home rather than spending on cars and lavish lifestyles, should they be taxed again? And there is a 5% tax on selling the homes too, remember (ok, technically it is levied on the buyer but they buyer reflects that in only having 95% as much cash to spend on a house). It is also odd that if you see your house as your pension fund (we do) then why should that be taxed but your pension pot is not? A mansion tax is picking on an easy target group and appealing to the envy of those who have saved less.

there is a lot of jealousy regarding people who have bought and those still renting. Especially those that bought before the bubble and 'made money'.

I think that BTL landlords should be taxed - if they've got spare cash to buy mulitple properties when a lot of people can't afford one then yes they should be taxed. Oh wait, then we'll get the 'accidental landlords' saying it was the 'true BTL landlords' pushing up prices leaving them in negative equity so they couldn't sell etc etc.

The idea of a wealth tax for a UK resident (domiciled) is insane. As mentioned, they are already taxed at 45%. If they're left with 55% of their income and they buy a house with it, you want to tax that as well?

The property market in London is distorted because of foreign buyers. It would be more sensible to tackle this.

I agree with everything Orphelia275 said.

BTL landlords are taxed. They will have paid stamp duty on the property upon purchase , they'll be taxed on the income from the rent and will pay capital gains if they sell for a profit.

You can't go telling the truth about what landlords pay Nancy, how will MNers be able to hate them quite so much if they aren't able to believe that they can swim in all their unearned riches?!

InMySpareTime, if that's correct then I'm shocked, and happy to stand corrected.

So pleased that Vince Cable is talking about land value tax and this seems to be slowly creeping into the political consciousness.

Crowler - no they are not. Income is taxed at 45% for the richest being paid by PAYE. It is very easy to be very wealthy without paying much tax at all. For example, anyone who bought a house years ago and seen it increase in value has a valuable asset which is not taxed and if it is their main home they will not pay capital gains when they sell it. That same person could have bought plenty of other properties as BTL investments through a Ltd Company, take dividends as profits which are only taxed at 10% below £32,010. Compare that to someone living in rented accommodation paying thousands per month for a tiny flat and still paying 40% on an income of £35k. Totally lopsided.

If they're taking income as a dividend, then the company has paid corporate tax on it. And as you know, the dividend tax rate increases quite a bit past 10%!

highest band of tax is 50 per cent isn't it?

It's gone down to 45.

agree with sparetime that the council tax bands are all over the place. I suspect that that would be a much easier and simpler and more politically acceptable fix to this problem - where I live the highest band is £320k and above. Let's say, to adjust for house price inflation, that's now £700k and above - so someone living in a perfectly ordinary flat or house anywhere within Central London (Wminster, Camden, Hammersmith and Fulham - normal people, normal places) is paying the same council tax as someone who lives in One Hyde Park in a £10m flat.

I think the highest band goes up to about 55 or 60% because at one point you lose your personal allowance so that pushes the marginal rate up above the headline rate.

Crowler spot on.

Being very very old I can remember the rent control days of the 1970's. The idea was to make housing more affordable. The reality was private LLs pulling out of the market and there being fewer homes available to rent. If you tax BTL LL's more, then a proportion of them will invest elsewhere instead and all you will have achieved is fewer properties available to rent and higher rents to keep up the BTL LL's rate of return (law of supply and demand).

I am not clear why BTL LL's are so demonised when they are providing flats/houses that people CHOOSE to rent (nobody is forced) thus providing them with a roof over their heads. Of course they take a profit otherwise why would they do it???

Corporation tax is 20% and it is very easy to reduce this as things like salaries are paid out as expenses and can be paid just below the threshold for paying tax. Then 10% dividend on anything after that. So still paying a lot less tax than someone paying via PAYE and that is how most BTL work (through companies to minimise their taxes) and they can write off mortgage interest so first time buyers have no chance when competing with BTL who have the odds stacked heavily in their favour (no surprise considering how many politicians are either landlords or have a vested interest in keeping rentiers happy).

VoiceofRaisin - I was told in no uncertain terms on here that I was unreasonable for evicting a tenant who owed me £7000 because "I still had everything and it was his home" - clearly he didn't value it that much as he was paying for £3k holidays rather than paying his rent......

OP - are you not a fan of mansion tax at all, or just in London?

Quangle, this also applies to a family earning between 50 and 60k, as they now face a marginal tax rate of 68% with 3 children. I'm not sure why a family in this situation, who can't afford to buy a home of their own should pay quite so much tax, when people living in very expensive houses who are not PAYE seem to be exempt.

Fleta

I am not a fan as I can't see how it can be implemented fairly across the country.

I have a problem with this because it is a tax on something you own, rather than something you are buying or selling. Council tax, I agree, is similar but that is really a localised tax to pay for services such as bins and libraries and it is based on the size of property / its value. There could be an argument for revising the top bands of Council Tax upwards to reflect the "super high" costs of the houses in some areas.

However, people taxed on their houses specifically will be being unfairly penalised for where they choose to keep their wealth. They could, instead, choose a Ferrari, or two £1million pound properties, or a lot of diamonds, none of which will be taxed.

People's circumstances do change. People live in huge, expensive houses they can't afford to heat. People are old and are left houses. Property is a very emotive issue. I am not sure how it will be possible to make this tax work and I am not sure it is fair on everyone. Already, inheritance tax hits people in that bracket, hard. I am in favour of charging when goods and services change hands (for example, VAT, or Stamp Duty) but I am not sure how you can justify taxing someone for continuing to own something, every year that they own it.

Ophelia: sure, corporate tax is reduced by business expenses - because that is not income (?) - so either they pay a salary, and that's PAYE, or they pay corporate tax (20%) and then income tax - not a flat 10% but actually 10%/32%/37%.

Like I've said, the problem is more likely the non-doms who are buying up property in London. These people are not subject to UK tax.

Tinlegs

I agree with everything you said.

There will be some people who own a real sizable mansion in one part of the country where the tax will be a minute percentage of their income and others (mainly south and London) where it could be anything up to all of their income and more. Thus meaning they have to sell their home and move area.

It's not right how ever much the posters say they have 2 million so who cares.

You live in London for all the benefits associated with it. Aww shucks you gotta pay more for the privilege? Don't expect sympathy from people sick and tired of seeing all the investment going to London and SE