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?

I am playing devils advocate a bit but I cannot feel remotely sorry for the poor souls in their prestigious Knightsbridge garden square flats, or any of the other 2 million pound homes - if it were a taxon homes worth 700k a d above it would be more convincingly unfair, but 2 million buys lluxury everywhere in the UK.

Oh and you can bet your life there will be horrific service charges because if the pool and porterage.

What differentiates a family home in Knightsbridge from a family home in Bradford, are you saying that once a property hits a certain value it should only be for investment purposes ? If so then I understand why you are supportive of the tax.

Mrtumble - I wish I could show you a picture of my house. It's very ordinary. Don't want to out myself. Zoopla thinks it's worth over 2m. Although nationwide house price calculator implies more like 1.5. It's a terraced 4/5 bedroom house. Postage stamp garden, no pool, no security gates. It's packed in on an estate. We moved here about 15 years ago. We love it, but a mansion it ain't. It happens to be in a popular area where there has been big house price growth. Now I'm not going to suggest we are not very comfortably off, but there is no way we have a spare £12,000 per year. If we were eligible for mansion tax, we would have to move completely out of the area. We are a family of 5 and a dog, so we couldn't downsize. And lots of families would be in a similar position round here. Now I don't want any sympathy but I still think it sucks. We have lived in this area for 20 years and I don't want to live anywhere else.

Sleep I am not sure whether you are being tongue in cheek ,- are we weeping for the poor souls because the pool and poster service cost them money? Should we also weep for the buyer of the mansion near Lancaster in case they can't afford toheat it or replace the roof?

*porter not poster, I am not sure what a poster service would be. :o

But the point keeps going back to over and over, just because you now own a house that is currently valued at £2m doesn't mean you spent £2m on it. Yes, if you bought it a month ago, or are buying one now, you can probably afford the mansion tax. But as someone linked earlier on the thread, a house that's currently up for £2.5m on the same road (and similar size/style - 4 bed houses that don't look excessively big for a family home) was sold in 2002 for £400k - now, if that person bought hte house in 2002 and stayed put, they might now have a house on paper worth £2.5 million as well, but they might not have the sort of jobs paying enough so they could buy it now.

We've been in the same house for 5 years and we now couldn't afford to buy it if we were buying it now, even though DH has had a couple of pay rises in that time. Few people guessed in 2002 that houses that were at the time worth £400k would be at the £2.5m mark in only 12 years time, it really has been the luck of the draw and not all parts of london have risen equally, the people who got 'lucky' shouldnt be forced out.

What on earth does it matter if you need a £2m house or if it's a luxury? The point is a £2m house in London would be worth 500k elsewhere. But the owner of a mansion in Yorkshire with acres of land will not pay the tax whilst the owner of a 4 bed in London will. That is not a fair tax on wealth. Yes, tax property if you have to, but tax it fairly.

But Mary that's where the slightly petulant cry of "unfair" is ironic - the hypothetical couple who bought for 400k in 2002 have made 2 million pounds by sitting on their arises. They may not want to move - but they may, and if they do, they have 2 million pounds even if they only paid the interest on a mortgage! How is that "fair" in comparison to somebody in another part of the country in negative equity or having made 20k over the same 12 years.

None of it is "fair". Maybe Great Uncle Fred left them the cash to buy the house/ deposit in the first place - who knows. People all over the country are sitting on money they've made through luck on property, a d others not. Its just a lottery in many cases, not "fair".

Arses not arises...

I'm not weeping for anyone mrtumbles just pointing out that the 'luxury' of the pool isn't even properly included in the £2.4m price tag.

It's pretty clear you aren't going to change your mind and you are exactly the type of person the policy is playing to...those that see £2m and think 'screw them', overlooking the fact that there will be very many wealthy individuals with different assets of the same value - a block of flats worth £500k each in London, a beautiful estate in the country - escaping any additional tax and that for very many people, a £2m property does not equate to a £2m unencumbered asset or a spare £15,000 a year to hand over. Those who will move to avoid the tax because they can't manage to afford it. They will still be very wealthy, they will soon be pushing up the property market in (mostly) the SE , leaving more central London for the real super rich. I don't see how that benefits anyone. We absolutely need to raise money from the wealthy, but this is not the way.

I know the area where those flats are. They are right next to the mainline into Marylebone station. On the other side of the tracks ( same road) is the large Lisson Green council estate. (DH used to live on the LG estate).

ukhousing.wikia.com/wiki/Lisson_Green_Estate

This is one the peculiarities of London that very expensive properties and large social housing projects are often next to each other.

The mansion tax strikes me as very similar to the 50% tax rate. A populist vote winner because it impacts on only a handful of people (100,000 homes in this case) and with the background of the economy of the last 6 years it appeals to people's sense of making someone else pay. Unfortunately these populist measures have a habit of being ill through because they don't consider that the will influence the behaviour of the impacted people which ends up having much more significant consequences.

There are households on my road that will be impacted. In the 80s and 90s when house prices bore some sensible relation to the average persons income, the kind of person who bought in my road were what you would call middle management jobs, civil servants, teachers, dentists etc and the houses were no more than £400k. Those same houses are now worth £2m. The people who bought these houses back then aren't your champagne swilling millionaires with spare cash hanging around to fork out mansion tax. So, they will be forced to move out of the homes where they have raised their families. The only people who will be able to afford to live in my road will by City workers. It's an odd way of promoting social cleansing.

What happens to the people who move out? Well they downsize but with £2m-ish proceeds they can afford to move out of London, pushing those prices up and creating a second wave of social cleansing.

It's just bizarre to think this is a good idea.

Haven't read this whole thread, but I don't agree with mansion tax. It doesn't tackle the problems at hand. You can't just penalize people because they happen to live in an expensive house. It might not have been worth that much when you bought it.

However, I would like to see tax on second homes and buy-to-lets. I believe those contributes to properties are expensive these days. The whole taxing wealthier people thing is a sensitive issue - I think we need a very fine balance… tax too much, and you take away any incentive to earn more money.

MrsDeVere
It hadn't improved in the 90's. DH was one of the many who had to move after a racist arson attack damaged the block he was in in 1997. It did prompt the council to tart the Estate up a bit.

Millie
Buy to Let's are taxed. You pay tax on the rental income and CGT on any increase in value when you sell it.

Yes but mortgage interest on BTL is tax deductible Chaz, they should change that for a start. Charge non resident owners council tax (as well as tenants if there are any). Charge double stamp duty to non UK resident buyers and second home owners. If people want to treat property as investments rather than homes then they should pay the associated costs. These measures would be fairer country wide (along with an updated council tax system) and help cool the property market - and I say this as a BTL landlord.

I am also a BTL landlord and don't disagree with you. It was just that a PP seemed to imply BTL wasn't currently taxed.

True-second homes are also subject to CGT when sold...in theory at least

totally agree Jads and i would like the councils to audit their LA properties and check if they are being sublet which does happen.

also people pay huge amounts of stamp duty in the first place

quite hilarious really that the very people who think this is fair are probably the same people who thought the introduction of the 40% tax band was fair because it wouldn't effect them...but look what happened the band got lowered so far it now entraps those very people.

Do you really think that this mansion tax will stay for at £2m+. Any sniff of this actually being passed and you will see houses being sold just under £2m to avoid the tax (amongst various other ways) and when the government realises not enough money is being generated they will lower it and keep lowering it to the point it will then entrap the very people who at the beginning were supporting it and watch how they will whine and moan how unfair it is.

I meant what Sleep said, Chaz.

Normal home owners can't deduct mortgage interest from taxes, so why should BTL???

I can actually understand why some businesses should be able to deduct cost from taxes - because they produce things, employ people, etc. which is good for the economy and everyone else.

BTL doesn't produce anything. Only people that are employed are estate agents.

How about making it totally fair and taxing everyone's home, say at half a per cent of value. Those who rent will end up paying extra because their landlord/local authority will have to pay the tax. Those whose homes are worth more will pay more. Still more of a tax burden overall for London and the SE, of course.

The people who own homes over £2m will be happy that they aren't being singled out for having the audacity to own a house that has gone up in value and the people who own homes less than £2m will be happy that those who own more on paper than they do will be paying for it.

Surely a vote winner all round.

I think it would be perfectly fair for everyone to pay a tax at a tiny proportion of the value of their home. So for example if you had a home worth £100,000 you might pay £1,000 per year, or some such figure. If your home was worth £200,000 you might pay £2,000 a year. If your home was worth £1,000,000 you might pay £10,000 a year. Or the rate of payment might be at a higher or lower figure than the 1% in my examples.

For simplicity we could put homes into "bands" rather than trying to make a precise estimate of value which could differ marginally for similar homes in the same street.

There is no reason why the Duke of Westminster or a Russian oligarch or a Saudi prince owning a home worth £150,000,000 should have his payments capped at the same level as his butler.

We could call this tax "rates" or "council tax"