Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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

585 replies

Redpipe · 15/09/2013 14:35

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?

OP posts:
ophelia275 · 16/09/2013 17:20

I think the point of Cable pushing the "mansion" tax (which incidentally seems to be popular with Labour as well) is to try and halt the London/SE house price bubble that is getting ever more crazy and was stopped from popping by using QE and low interest rates. He seems to be the only politician who can see that this bubble is not a good thing and will end up causing far worse problems than were seen after the 2008 crash.

Basing an economy on house prices is the height of insanity and it can only do untold damage to the economy and society as it sets so many negative precedents. High housing means that jobs need to be subsidised with housing benefits and tax credits because the cost of living (mainly housing) is so expensive in London/SE. Reducing housing costs would bring down the welfare bill for starters and might actually start to revert back to the sensible criteria of banks lending 3 x income so that houses can be homes rather than speculative assets for the older generation.

Redpipe · 16/09/2013 17:21

expatinscotland
eh?

OP posts:
Owllady · 16/09/2013 17:23

My husbands Aunt is one of these people who hasn't been hit by the bedroom tax, she lives in a 2 bed house and has lived there since it was built in the 60s. It has had the bare minimum of work carried out on it and she is very infirm. She has been told by the council they have no-one after houses like hers anyway (it's a bit rough where she lives) and she regularly gets admitted to hospital because when left to her own devices she lives off beetroot sandwiches, like she is in the war/rationing period.

Why would anyone envy her having an extra bedroom? Most days she sleeps downstairs. the council have NOTHING they can rehome in her in, locally or otherwise.

expatinscotland · 16/09/2013 17:25

Eh, what?

twistyfeet · 16/09/2013 17:26

'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.'

This happens to poor pensioners all the time OP. My elderly mum was evicted by her landlord because he wanted his house back.
But its horrible when anyone has to move away from their support. Right now its happening to thousands of poor and disabled people, especially in London due to the 'bedroom tax'. It was only a matter of time before they started on everyone else. At least the pensioner in a 2 mill house has options which are not open to everyone else.
However, the vast majority of those affected by this proposed 'mansion tax' are not going to be 80 yo pensioners.

vixsatis · 16/09/2013 17:27

I would have to pay this tax.

Zero inherited wealth. First generation at university. Same for my husband.

We both do city jobs (not the ones which caused the crisis) which we no not like very much because we wanted to be financially secure, not dependent on anyone else and to be able to cope alone and support our child even if something happened to the other. We also want to be able to pay school fees.

Both of us have a minimum 12 hour working day, often longer. Our personal lives are disrupted by travel and client demands. The pressure is huge and the people we have to deal with often very unpleasant. The upside is that we are, by most people's standards, very well off. The benefit of doing these ghastly jobs is not just for us: probably about fifty people in our organisations are directly dependent upon what we (as individuals) do to give them a job. At home we employ(on good terms) an au pair, a cleaner and a gardener. We do not claim child benefit, we do not use the state schools or (except by way of back up) the NHS. We both completely accept that we should also pay a fair share of tax. Neither of us had any objection to income tax at 50%. Neither of us has ever done anything to seek to minimise the tax we pay and, for people who actually work in this country it is pretty difficult to do so.

Our jobs bring into this country substantial amounts of money by way of payment for invisible export. Someone has to generate the income out of which the public sector is paid for.

In order to do the ghastly jobs but still have some family life we need to live near work. Our house is about 3,000 sqare feet: four beds, 2 bath, drawing room, sitting room, big kitchen/dining room plus bed/bath/sitting room for au pair and nice, good sized garden. This is not in a fashionable part of town but the house would almost certainly be assessed as worth about £2.3 million. It was paid for entirely out of income which had already been taxed at 40/45/50%; and if we were to die tomorrow, another 40% would go in tax. Out of the sum originally earned, there is not really much left, especially if an annual 1% is taken by way of "mansion tax".

All the time we are working, we can afford the tax, even though it is monstrously unfair; but we will not be able to do so when we retire. This house is our home and I had hoped never to have to move. I think we have done our bit for society one way or another and I do not think it much to ask that we keep our home. Before someone says that this is no different than someone who has to move because of the bedroom tax, that is nonsense: we have earned our house and paid for it. It has not been given to us by the state, paid for by someone else.

What irks me even more than the reality of having to pay this tax if introduced is its name: "mansion tax" is a disingenuous term designed to generate unthinking envy and hatred of one part of society by others- the house described above is hardly a "mansion". It is the equivalent of mindless benefit bashing. I used to vote liberal democrat on the basis that they were inclusive and meritocratic. Never again. I have wokred for my home, paid my taxes and deserve to keep it.

If starting again now, seeing that a miserable, wealth creating private sector job leaves one vilifed and not even entitled to stay in one's home when old, I might have chosen a more comfortable, interesting path, probably paid for out of someone else's taxes.

Apologies for the rant. I have been holding off all day.

ihategeorgeosborne · 16/09/2013 17:30

Orphelia275, you are so on my wave length Smile

Redpipe · 16/09/2013 17:31

twistyfeet

This happens to poor pensioners all the time OP.

I am interested you understand the plight of people who are poor and have to move but people who have an asset which has made them rich you do not.

Can you not see that you are biased against these people because they have money regardless of the fact it will cause them great emotional upset!

OP posts:
soul2000 · 16/09/2013 17:31

This is the worst kind of tax. This tax is popular soley on the basis that 99.5% of the population will not pay it.

There is no reason other than a politician (CABLE) trying to make a name for himself. Calculating that he will have the support of people because guess what "We will not pay it".

Believe it or not,some people who live in valuable houses are asset rich income poor yes even in 2 million houses. Anyway i thought 7% stamp duty was a mansion tax. If when the owner of a 2 million pound house dies, there is anything left after 350/700k guess what, the state gets 40% IHT.

The other thing people need to be aware of is within 4 years other bands will be introduced. You can bet Mansion Tax will start at 1 Million.

A tax is not right because it does not effect you. Any money made from Mansion Tax would not even go to building houses for people.
The money that would be burnt on stupid vanity projects.

P.S People need to be aware its not just London and the South East effected by this political nonsense.

Redpipe · 16/09/2013 17:35

vixsatis

I agree wholeheartedly with your rant Wink

OP posts:
ihategeorgeosborne · 16/09/2013 17:39

A property tax is coming in one form or another. The cost of living is becoming crucifying. Many people on decent salaries cannot afford to buy their own homes. People are not having wage increases in line with inflation, if at all. Rents are rising to ridiculous levels, due to BTL landlords over extending themselves and being greedy. We will have a lib/lab coalition in 2015 and they will bring in a property tax.

MajesticWhine · 16/09/2013 17:39

cardamomginger makes a good point. Any kind of threshold (including stamp duty thresholds) distort the usual market forces which act on property prices. There will be huge demand for properties which have been valued under the threshold. This could result in them selling for a price above the threshold. Does that mean they would then be subject to the mansion tax, or would the original valuation stand (like with council tax)?

twistyfeet · 16/09/2013 17:46

No, OP, I am sympathetic but feel the person could move a street or two. I'm sure they wont end up hundreds up miles away. 2 mill gives that option.

Although to be honest I'm not sure this will control house prices in London which I assume is the aim. The truly rich will just pay up or find avoidence methods and London will continue to be a bubble.

soul2000 · 16/09/2013 17:48

Thats great then! We will be going back to "DENIS HEALEY" with "VINCE SQUEZE THE RICH UNTIL THE PIPS SQUEEK CABLE" .

These kind of policies will not make it better for the North/Midlands Wales. I leave out Scotland "GOOD RIDDANCE" you can become the SSR "THE SCOTTISH SOCIALIST REPUBLIC" if you want .
.

For the rest of the country taking money from the wealthy does not make the less wealthy better off . In effect the money just gets taken out of the Economy and wasted.

It does the country no good apart from making Jealous people feel good.

Redpipe · 16/09/2013 17:51

Twistyfeet

"No, OP, I am sympathetic but feel the person could move a street or two. I'm sure they wont end up hundreds up miles away. 2 mill gives that option.

Why do you think houses prices would be any different a street or two away? I am genuinely confused?

OP posts:
InMySpareTime · 16/09/2013 17:54

Vixsatis the tax is 1% of the value over £2M so you'd only be taxed £3k per year in your case, it's not as bad as people are making out. If you can afford a number of staff, you can afford £3k.

twistyfeet · 16/09/2013 17:55

Cos London streets vary so much. There must be a property for said 80 yo less than 2 mill within half a mile.

Redpipe · 16/09/2013 17:57

twistyfeet
Although to be honest I'm not sure this will control house prices in London which I assume is the aim. The truly rich will just pay up or find avoidence methods and London will continue to be a bubble.

Don't quote me on this but I think this is just a revenue strategy and vote winner. You are right though the truly rich will just pay up so as always this will hurt the people who can't pay the tax only and therefore the ones with less disposable income.

Vixastic has a very valid point though it will affect people like herself when retired. Only the super rich can afford a further tax to pay out of their pensions.

OP posts:
Owllady · 16/09/2013 17:58

I am not jealous of anyone I have no reason to feel jealous of anyone as material wealth doesn't interest me tbh. I wish I could afford my own home for security as I have a very severely disabled child, but luckily I have a landlord who is happy for me to stay in home, paid for by taxpayers aka my husband. It is not abnormal feeling to think things are unfair for people in other walks of life and to draw a perception of this proposal based on that.

As I said, I live in a naice area 40 mins from central london by train and a 2 million house rarely appears on the market. I am not in the Midlands or Wales or the North (oh I am north of watford) BUt even the houses here are not affordable to local people and they are a fraction of the price of what we are talking about.

Whether or not the proposal is fair or not (in your eyes or anyones elses) , I still take umbrage that having a 2 mill house is not wealthy or well off compared to the majority. It's just lacks total perspective to think it's not

Redpipe · 16/09/2013 18:03

Twisty

But you would be able to just go down 80K. If property prices keep rises as predicted you'd have to go down a fair amount to keep yourself out of the bracket.

Although with stamp duty at 7% and moving costs you'd relieve yourself of some cash just to get yourself out of paying mansion tax.

To answer your question no houses a few streets away would not be significantly less.

OP posts:
Nancy66 · 16/09/2013 18:04

House prices in London and the south east are insane.

I bought in London in my 20s because I could easily afford a house and take on a mortgage that was around 3 x my salary. I was well paid at the time but not a ridiculously high earner.

Contrast that with now and anybody who wanted to buy my house (in SW London) today would need to be on a salary of around £350k

Redpipe · 16/09/2013 18:05

owlady
I still take umbrage that having a 2 mill house is not wealthy or well off compared to the majority.

But some people are only wealthy enough to pay the tax if they sell their house. That's the point.

OP posts:
Sleepwhenidie · 16/09/2013 18:05

I think everyone is focussing on the fact that in comparison to most, owning a £2m property does make you rich, and of course it does....but it doesn't necessarily mean you have a spare £2k-£3k of cash to chuck at the taxman every month. Most people living in the £2m houses will, believe it or not, have stretched themselves to the limit to afford it - same as most house buyers do - you live to your means. They will have paid tax on their income which they then use to buy a house, which they also pay stamp duty on. To then be taxed again and again for having invested in an asset that grows is simply unfair in my mind...where do you stop with it, charge extra tax for people with expensive art collections, yachts, jewellery Confused, who may happen to live in say, Yorkshire, in a £1.8m house?

Also think about the effect this will have on the market and London 'community'. What is already happening, due to stupidly high prices, driven by the Russians, Arabs etc, but also a big influx of wealthy French escaping punitive taxes at home, is that very few 'normal' people will be able to afford a family home and when they need one, they will leave London for a house, yet probably continue to work there, pushing prices further and further up, further and further out of London and leaving behind either the very rich, or those supported on benefits...no 'middle class' family element at all, which won't benefit anyone.

Redpipe · 16/09/2013 18:11

nancy

That is so true and so scary.

I feel so sad for the young trying to get on the housing ladder and this mansion tax will only serve to push more average income families out of London as well. Regardless of the price of their property there are plenty of families with medium sized incomes that will be pushed out leaving just the super rich to it.

OP posts:
Redpipe · 16/09/2013 18:12

sleepwhenidie

Crossed posts Smile

OP posts:
Swipe left for the next trending thread