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?

It's part of their 'value' as much as my earnings are part of mine

If you really can't see the difference between a figure on paper and cash in your bank account, then I doubt I'll be able to help you.

mumoftwoyoungkids

If you are under 50 then you are probably young enough to flog your house, move 2 miles down the road and buy one for half the price.

You seem to have no idea, you can't buy 2 miles down the road for half the price.....FFS!!

And you know that equity release involves servicing debt right?

Whatever the rights or wrongs of this, I think it's fair to say that housing prices in the UK generally, but in the SE particularly, are just completely out of sync with average incomes.

Redpipe - I don't think you can use that argument about forced relocation. In effect, the mansion tax could be argued to be equalising the playing field after the introduction of the bedroom tax on social housing. While the difference is that the home owners aren't being subsidised by public funds, they are also in a uniquely privileged position of sitting on a huge asset - and assets are something the taxman has always wanted a cut of. Saying "but I earned it" isn't a defence against income tax, so logically it can't be one against this either.

FWIW, from an empathy POV, I don't want anyone to have to leave a home they have lived in for 40+ years just because they can no longer afford it due to a tax. But the world doesn't work like that.

Dahlen

The thing is though that the bedroom tax has not been applied to pensioners so effectively pensioners who have social houses are guaranteed not to have upheaval but a private owner could. Please correct me if I'm wrong but I think pensioners are exempt from bedroom tax on social housing?

In addition to the mansion tax the taxman will get another huge cut when the pensioner dies and the estate is handed over to family.

No you're right I think. That's a fair point, but again it comes down to sitting on a massive asset. Pensioners moved as a result of the bedroom tax would have to go where they're placed, possibly with no community support (if they're moved away from family and friends), and no capital to ameliorate that. Someone selling a £2.5m property and moving out a zone or two would be in a position where they could still purchase outright, in a zone of their choice (limited by price, but still given a choice), and have plenty of money leftover to finance travelling, care, etc.

Saying "but I earned it" isn't a defence against income tax, so logically it can't be one against this either.

You're comparing income tax to a wealth tax.

Yes I am. I don't see a problem with that. The point is that the government has always wanted its take of people's money - whether earned, accrued or inherited - and will take it regardless of whether people feel it's unfair (unless they think it will alienate enough of the electorate to lose an election).

I'm shaking my head at the comparison between a reduction in taxpayer-funded benefits to a real tax on an asset you've bought with after-tax money. I'm at a loss for words.

Redpipe

If someone is in a £2m house they are very wealthy, in equity if not cash. If they don't have the cash to pay the tax then it might be a bit sad for them but I'm afraid that's the extent of my sympathy. I don't see living in the same house as some sort of inalienable human right.

Said this a few pages back, but I'll say it again. The mansion tax will probably mean that properties valued around the threshold (including under the threshold) will become impossible to sell. Who is going to want to take on a property when they will be taxed annually for every year that they own it? People, including those who simply cannot afford to pay out these sums every year, will be stuck with properties they cannot sell.

Those for whom these annual sums are genuinely financially irrelevant are likely to be buying at significantly higher prices.

'Just sell'. 'Buy something cheaper'. Who are they going to sell these houses to?

I am agog that people think those of us in the SE on SE wages can afford 2 million houses, absolutely agog. There are a small minority of people on this thread who are living on another planet, quite frankly. Honestly, have you heard yourselves? I do realise it's quite normal to move in circles with those of you of similar wealth, but surely you notice other people around you? you travel up the road to visit X town and see different movements in society?
or do you really just sit in your house, do your well paid job (and it must be well paid because my dh earns a very good salary and as I said before we cannot afford the 400k house in a naice area) mix with your friends of similar wealth and feel hard done to? :( because really you aren't, you aren't hard done to at all. having a house worth 2 million (assuming you don't have a 2 million mortgage - who does? I have never met anyone with one..) means you have a lot more choice than the vast majority of people in the UK

Why?

Either we're discussing this purely from an economic POV, in which case poor pensioners who are asset rich but cash poor is not an argument because it is an emotional one. Point is that a £2m asset is a sizeable asset.

Or we're talking about it in terms of people being forced to move because of the nasty greedy government.

It has been well documented as to what section are pushing the house prices up in London cardamomginger
whether that's right or wrong is another discussion, but I know my friend who has sold and is buying in London was treated with utter contempt by estate agents as she couldn't or wouldn't be drawn into bidding wars

That was to Cowler BTW

If you really can't see the difference between a figure on paper and cash in your bank account, then I doubt I'll be able to help you.

I don't recall asking for any help. I can't see a problem with being taxed on worth rather than cash.

Owllady, I'm not wealthy, I merely oppose the mansion tax.

I just think house prices are out of control anyway. I think none of these discussions would be taking place at all if local housing was priced at a level for locals wages and second home ownership was taxed at a much higher rate (or something, but second home ownership causes loads of problems as well)

The thing is, all the 80+ people I know locally would be totally lost and away from their support system and often just too old to move. I think if someone is in their twilight years and their monthly income is not massive they should not be forced to move in order to pay a tax they cannot afford otherwise. It does not mean I do not understand the plight of many in the country or that I don't understand how on earth young people will ever buy a home of their own. Those things are terrible too.

I am stunned that so many posters here support such a tax with the possible implications for some people.

If the people I know are anything to go by, if they thought cash was so important they would have sold up and moved ages ago but they have chosen not to release any cash from their property because friendships etc. are of utmost importance to them. The fact people think it's ok for them to move because they be better off financial rather than emotionally shows to me how many posters think.

Lastly many posters would be up in arms on here if we were talking about people with less money. It's the attitude that it's ok for 'richer' people to be forced to move because they'll have cash to spend.

I'm not talking about what pushes up house prices. I'm talking about houses in a particular price band becoming much harder to sell. And that will have a knock-on effect lower down the housing food-chain as lower priced properties become more keenly sought after. If not bidding wars, it'll be other stuff - paying the other side's fees, including furnishing etc free, cash buyers only, etc.

I'm sorry your friend was treated so badly. Some estate agents are scum.

onlytheonce
"If someone is in a £2m house they are very wealthy, in equity if not cash. If they don't have the cash to pay the tax then it might be a bit sad for them but I'm afraid that's the extent of my sympathy. I don't see living in the same house as some sort of inalienable human right"

But it is a right for pensioners in social housing!!

Do none of you worry about what kinds of problems the house prices at this level are going to cause long term?
The country is struggling to pay for adult/elderly care already and that's with people (on middle/lower incomes esp) selling their homes to pay for care. We have a whole generation (at least) of skilled professionals unable or struggling to buy their own homes, let alone those on lower wages.

So full circle, what will happen It frightens me to death tbh

I know home ownership is not the be all and end all, but the reality for us renting privately is that our outgoings are high, so high we find it difficult to save (we get no family support ) and sometimes our living conditions are poor because the house is old and our landlord is tight (he has a house worth well over 2 million though :o )

'But it is a right for pensioners in social housing!!'

They do not own the home.

I don't see living in the same house as some sort of inalienable human right.

Not human rights; property rights. When you buy something, it's yours.

'I am stunned that so many posters here support such a tax with the possible implications for some people'

I'm stunned that anyone considers owning a £2m asset as anything other than wealthy.