to think mansion tax is an unfair tax on London and the South East?

[goodnessgracious]

I disagree with mansion tax but regardless it seems to me to be unfair on Londoners.

Aibu to think that it may also force some people to sell their properties who are income poor but property rich?

Well, I thought it was a good idea but you lot have convinced me it's not going to work.
There does need to be some way of taxing unearned housing wealth, though. It's crazy that the money people work hard for gets taxed while money they get through just having been lucky to buy in the right place at the right time isn't.
I think it would help to cool the housing market, but only, as people have said, in a very selective way.

I fully appreciate it sounds like complaining how tight diamond shoes are Turnip but honestly, the majority of Londoners who have seen their house values soar would prefer them to have stayed lower and been able to move up the ladder in the same way people in the rest of the country usually do. As it is, because the leap from your home's value to the 'next rung' home is so great (especially once you add in stamp duty), your only options as your family grows are to stay in a cramped flat in London or move out with a wodge of cash to commuter belt. Most would prefer to stay where they have established roots-friends, schools, community, than start afresh elsewhere.

Sleep
I couldn't agree more. To give a concrete example, we bought our 3 bed semi in Zone 3 about 2 years ago. I did need a lot of work so we did get it at a good price. There are now 2 bed maisonettes in the next road on sale for almost what we paid for our house. So people who could have afforded this house 2 years ago can now only afford a maisonette. Am I laughing all the way to the bank? No! I might have gained on paper but how are my two DC going to get on the housing ladder when they grow up?

It needed
(I could probably do with refurbishment too )

The tax that's really unfair on London is stamp duty, which prevents middle income people moving home, ties up property that would otherwise be on the market, distorts the numbers relating to what actually needs to be built, and keeps the top end of the market unrealistically high.

If I had a £2m London house and not the tiny flat I think I'd sell it ahead of this tax and buy several smaller properties. It's not a heart-rending dilemma.

Turnip. I wasn't lucky to buy in the right place at the right time, as I explained earlier.

I knew I was never going to be a big earner, and I've never made masses by just occupying a house.

I started with a small flat, and carefully planned my way up the housing ladder to my current 3 bed over 20 long years. I worked to increase the value of my properties, painted, stripped floors, made curtains, every penny went into the house. Sold the place id put my heart into when I could afford that next tiny step up, painted, stripped floors, made curtains.

I'm now sitting in a house I could not afford on a nurses salary, with a huge mortgage because I have spent 20 years demonstrating to my bank that I never miss a mortgage payment and I can increase the value of a house.

It is not a matter of deciding to buy a house one day, being "lucky" and finding a nice convenient one in budget. That rarely happens.

I don't consider the equity in my house "unearned", in any way.

If you live in London, Micah, then, yes, it is substantially luck.

Why? Why would the fact I've worked to climb the property ladder be any different in the north to the south? It's still scrimping and saving and endless painting- in London I'd just need a bigger mortgage or to scrimp more to make that leap from one bed flat to two bed flat.

Money in property isn't money unless you sell or downsize. The equity in my house is my pension, I can't afford to pay off my mortgage, so it's interest only. When I sell I hope the equity will buy me a nice little retirement flat. If a chunk of that is taken how do I live? Back on the benefits system? What's the sense in that?

I think it's high time we went back to buying property as somewhere to live rather than an investment opportunity.
If DH and I were buying for the first time now, we could just about afford a 2 bed flat in a really grim area and we'd have to move out of London which would break our hearts.
In those circumstances, I could well imagine myself looking at people like us and thinking, 'those bastards have made half a million quid just by sitting in their house for 12 years, they should pay tax on that'. I'm sure I'd feel pretty angry.
However, I now realise that you can only make a fortune from property if you sell it. Otherwise it really is just numbers on a piece of paper.
We have a house that is valued at a lot of money but we still have to borrow money from my DPs sometimes, we'd still be stuffed if the boiler packed up tomorrow.
Knowing that we could sell up and buy a mansion in Scotland and be mortgage free isn't much consolation when we have no intention of moving to Scotland or anywhere else.

Micah - if you are in London, part of the increase in value in your property is because London has risen more than other areas. That isn't down to something you did, it's circumstances outside your control for which you really can't claim credit. The proportion of the value increase in your property that is the result of your work you did on it is earned, but much of the increase in its value is nothing to do with that work.

Tunip, we already tax housing wealth. When these people die 40% of everything they own goes back to the state through confiscatory death wealth taxes. It is called inheritance tax. If in addition someone has paid say £12k a year for 40 years on their property too that is an awful lot of money the state is taking.

Sleep makes a good point that it is also unfair that people have not had time to plan and it will apply to houses already bought. People may have bought that house using their last penny having worked out they can afford council tax of £3500 a year and suddenly they will have £12k a year + in mansion tax to find every year too. if we applied it only to people who buy properties over £2m from now on it would be fairer. Those planning to retire could buy a £1m house and £1m Spanish flat for holidays say or there are quite a few families with struggling children with babies where the parents and children club together and buy a big house. Suddenly to find you have to find the mansion tax will be hard for those and they might had they known about it instead have left the parents in their smaller house and bought a small one themselves. The tax particularly attacks families who live multigenerationally and support and love each other rather than 6 family members living in 6 flats all over the country needing 6 lots of local council support in old age. It may also be racist in effect as more Asian families live with family than others. One reason the big 5 - 6 bed houses around here are popular is that sons often live with their parents after marriage and the grandchildren and sometimes two sons (although how their poor wives cope living with mother in law is another matter).

flipflops so...faced with a mansion tax bill you would sell your 3 bed terrace, buy a one bed flat to let out and a 2 bed flat to squash your family of four into. There's a reasonable chance you will sell to an overseas investor that leaves the house empty or let's it out (either way, an investment property). You are living in worse conditions and have added two properties to the non-resident, pure investment housing stock in London, how the fuck does that help lower prices or make more homes available to people who want homes, not property buy?

Apologies for the auto correct 'let's'!

Tunip that isn't really fair. If you climb the ladder in London it's no different to climbing the ladder elsewhere, it's all relative. If you live in a 2 bed flat that rises to 500k, in order to buy a 3 bed house in the same area near your children's school/family etc you would have to stretch to say a 600k house. You will be hit with 7% stamp duty making climbing the ladder far more difficult. People have to therefore work harder on their properties to try to sell their pokey 2 bed above market rate to be able to afford the stamp duty on the 3 bed.

This idea that everyone should sell up and move up north is frustrating. What about your children's schools, their friends your family?
Not to mention the fact that people need to work in London as that's where the jobs are.

Benchmark, no-one is saying everyone should move up north. What I have said in this thread is that the current situation where London and the south-east are massively overpopulated because that's where the jobs are, is generally a bad thing for the quality of life in both areas. More job opportunities and investment further north would help spread the population out a bit and make life more comfortable.
When people have jobs which are mobile and talk very negatively about London, I do wonder why they don't move (and some people have explained the reasons, for them). I don't think that's an unreasonable thing to wonder. If they're happy with the situation, sure.
We all make decisions based on a range of factors. We've recently had to move because in our areas there was literally no choice of secondary school and the local one was very poor. Obviously it's not ideal to move away from friends and disrupt the kids, but it's not unthinkable.

But everybody else is excluded from that area.

Unless you were lucky and bought before or are just plain rich most other people are excluded from living and thus working in London without paying extortionate commuting costs from other ends of the country.

London is frankly being kept for an elite few who should contribute more.

Also there are jobs all over Britain where the rest of us work and move to and from where the work is.People elsewhere have long had to get on their bikes and look elsewhere for work.

Frankly if you can't afford to live in London you can't afford to live there.My dh can't afford to live near his London family and we're lucky enough to be able to live near our SW family,many don't have that luxury.

Funny how nobody cares when it's families a long way away from London who are driven out of their communities but when Londoners are faced with having to accept reality hands are thrown up in horror.Funny how many Londoners are only too happy to drive people out of their Cornwall communities when buying their second homes but when faced with the same they don't like it.

Lapetit on the one hand you are saying it's not fair that London has become a place for the very rich and normal people are excluded from living there.
On the other you are saying people in London should pay more, thereby forcing out all those from the area that aren't rich. Right.

It's a bit like saying to someone "right, your parents estate is currently valued at £1m and your the sole beneficiary, so we'd like you to pay the inheritance tax due on that now. You can't wait until you've inherited it and pay it out of the money you actually get, you have to just use your savings now. What do you mean you don't have it? You stand to inherit £1m, you are rich! You are far better off than those who's parents have nothing to leave them. What do you mean, you might not get the full £1m when they die if they have to use some of the money for care? That's tough, we are basing it off our predictions of their current estate value. No you won't get your money back if by the time you get it the estate is worth less."

This is spot on. And why only property as an asset to be taxed? Why not nice car or savings?

The new tax would be payable by someone with zero equity in their house, no savings and an over draft. It is tax on capital you do not have as they make no allowance for mortgage debt.

This too

Erm its still your choice to buy an expensive house. That said, good luck with getting a 100% mortgage for 2m

Toby

You seem to have totally missed the point

Completely agree with Goodness Gracious, Mary Westmacott and others. This is an utterly stupid idea. Like most ideas that seem to shoot out of the arses of our MPs. If you want to cool the housing market and tax wealthy people more there are lots of other ways to do it that would probably yield better results.

Yes, your choice to buy an expensive house but when people buy houses, even in London they, like most other people, generally buy based on the maximum cash they can afford to pay for their mortgage etc. believe it or not, even people buying in the £1-£2m bracket don't factor in a spare £15k a year!

Even in London, who actually needs a 2 million pound home though - the only parts of London where that is the cost of an "ordinary 3 bed semi" are Kensington and Chelsea, and a couple of other super rich areas - prices are expensive all over the capital, but nothing like 2 million for an "ordinary" 3 bed in most parts.