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?

[SomethingOnce]

If tax gets much higher we will move abroad, as would many others.

Off you go then. I expect we'll get by.

[merrymouse]

The thing is it's not a huge fortune unless you sell it.

I think there is an argument for charging CGT on a main residence if it sells for more than a certain value.

However, how would you honestly value that last house? All the houses in the street are probably worth well over £2m but this house has one bathroom with a separate loo, and probably needs quite a bit of structural work. It looks similar inside to the terraced house my IL's used to have in an ordinary street in Cardiff. If you are only looking to raise about an extra £1000 a year from well off people, I think there are more straightforward methods.

[InMySpareTime]

Thing is, they have found ways round the more straightforward methods. They have to live somewhere, and as (apparently) every other house in London will get taxed, that's a lot of £1ks coming in.

[VoiceOfRaisin]

somethingonce yes, I expect you will be fine, as will I, but for everyone like me who leaves, the exchequer will be £0.5m pa worse off and a couple of ordinary jobs (staff we employ) will be lost to the country. Isn't that rather counterproductive if the government is trying to raise revenue ?

The biggest remaining tax loophole, which is one large reason why foreigners snap up expensive houses here, is that non doms pay no CGT on UK property even when those houses are not their main residences. That makes UK property a tax free investment for them, and quite a blue chip one that they can also stay in occasionally, and enjoy some smart restaurants and theatre for a week or two a year. Crazy: fuels price rises and keeps properties empty

[Beastofburden]

The discussion on leaving is an interesting one. People are coming to London not only because of the tax breaks, but also because property is solid, the currency is independent, there are only minor political and social problems compared with much of the world, people are nice to foreigners on the whole, and education is good in some schools. I think you could safely close some more non-dom tax loopholes without losing the influx of rich Greeks, Italians, Spaniards and Russians who dont fancy leaving their assets in their home country.

And of course some people will leave the UK if taxes rise- but many more will think about it and not do it, for family reasons, or barriers to entry elsewhere, or other, non-financial reasons.

[Crowler]

I do believe, upon more research, that is is a tax on only the value that exceeds 2M. So it's a fairly minor tax for the kind of people we've been discussing on this thread.

That being said, I disagree with it.

[Crowler]

There's a pretty large influx of French house-buyers in my neighborhood, because we're outside of uber-expensive South Kensington but still just a 10/12 min bus ride to the Lycee.

They are driving house prices up, our house was on the market (briefly) earlier this year - we took it off to do some improvements.

I was recording our estate agent via ipad (because I thought they were incompetent, which they were) and about 80% of the people who looked at our house were French.

[Sleepwhenidie]

Same in Kentish Town Crowler, the opening of the new lycee there coincided with the change in administration in France - where they are taxing the wealthy evidently beyond their tipping point.

[merrymouse]

If the existing taxes aren't working (and they are based on money actually changing hands), I don't think this one is going to be easier/more effective to administer.

The people who avoid the other taxes will avoid this one.

[Beastofburden]

very true, merry. Unless unpaid tax piles up as a legal charge against the property, so it cant be sold without settling the debt. The Land Registry could record a charge on all such property each year, and the onus would be on the landowner to prove payment of taxes at the time of any new transaction, including further borrowing.

[Crowler]

A new lycee in Kentish Town, I didn't know!

Today I saw an article that seems to confirm it's 1% on the value of the house exceeding 2M, so it's pretty softly-softly on the just-2M houses (2K per year). It works out to be a double council-tax bill, sort of.

I remain in disagreement.

[Corkyandviolet]

This one is in a desirable location, and no mansion tax at all

[Quangle]

yep Kentish Town now crawling with French people! DM lives in a block there and when she moved in it was pretty mixed. Now she's virtually the only non-French person there.

[mewmeow]

Yabu.
Owning a two million £ house.. doesn't make you rich?! :s ... Is this a joke?
What does then?

[ubik]

Dp and I moved out of London 10 years ago as we saw the writing on the wall and knew we couldn't afford to live there and raise family, live in a nice area, walk to work, work part time etc

My mother's side of the family have always lived in south London: Peckham, Camberwell, Bromley. My great grandfather grew up in a Georgian terrace in Camberwell they were all working class, lower mc background.

I cannot believe how much London has changed in the last decade. SO much money floating around the south east. The clean streets, the bikes, horrid new buildings.

[Beastofburden]

the weird, weird basements full of private gyms and cinemas....

[IceBeing]

voice "but for everyone like me who leaves, the exchequer will be £0.5m pa worse off and a couple of ordinary jobs (staff we employ) will be lost to the country. Isn't that rather counterproductive if the government is trying to raise revenue ?"

I am sure if you leave then someone currently working the same hours you do for 1% of the pay will leap at the chance to fill your shoes....

[IceBeing]

oh and they will probably be happy to find the new tax as their salary just increased by a factor of 100.

[Sleepwhenidie]

Ice - even if that were true it would still mean the PAYE and employment of others would be lost wouldn't it

I don't think anyone can seriously argue that owning a £2m house doesn't make you rich by any normal standard - but in London, it certainly doesn't mean you have loads of cash. That discussion aside - in answer to the main question posed by the OP, yes the mansion tax will penalise people living in the SE unfairly. By all means tax rich people more, but it should be done on a fairer basis than just picking on the ones that happen to own an expensive house in London, rather than all the others that own assets elsewhere.

[VoiceofRaisin]

icebeing but there won't be a job vacancy Our business would come with us. We have an international client base and we would simply move the whole business.

It is tempting to squeeze the rich but measures to do so often do not raise any more tax for the government (like the 50% income tax rate resulted in a fall in revenue) which is why they are more about envy than raising funds. It's sad that people are so easily lured into jumping on the bandwagon of supporting a tax for those that are better off than they are without thinking through why.

Those on high incomes already pay a very very large amount in tax. The highest earning 1% provide nearly 1/3 of all Government income. You can't afford to lose them lightly.

The mansion tax is an envy tax.

Instead, get rid of non-dom tax breaks, and introduce higher bands of council tax with an increased rate for empty properties. This would put everyone on a level and help keep housing in use especially in central London where much of it stands empty for most of the year.

[Crowler]

VoiceofRaisin is... the voice of reason.

[Beastofburden]

Instead, get rid of non-dom tax breaks, and introduce higher bands of council tax with an increased rate for empty properties.

what VOR says. definitely.

[Crowler]

I think the problem is that non-doms get no press. They're stealth.

[merrymouse]

Do you mean non doms or non residents?

[InMySpareTime]

Why would those on super high incomes move out of the UK when they won't even countenance moving oop North?
If such as "Voiceofraisin" have an international client base, they would most easily avoid the mansion tax by moving within the UK.
No need to skip country.