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?

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

Really? I thought we already had that.

So no £2m mansion tax necessary after all. Everyone happy again.

Except that capping means the Duke of Westminster pays the same as his butler, despite having a home ten times the size and ten times the value. Which I say is wrong.

"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. "

You what? You know the 40% tax band was actually REDUCED from 83%, by Thatcher?

And it's actually not entrapping anybody, the real tax rate inclusive of NI is 40.2% basic rate, 49.0% higher rate. Which isn't so very different.

"Really? I thought we already had that."

I think the proposal is not for council tax, but for rates, or as it is called in the US property tax.

On a $720,000 house in San Francisco, you would pay $8,641/year.

www.sfexaminer.com/sanfrancisco/san-francisco-property-tax-take-to-exceed-2-billion-for-first-time/Content?oid=2576548

The council tax on a $720k in London could be as low as around $1,000.

YANBU

And Owning a £1m house in London doesn't make you rich (although £2m does). As others have said, it doesn't mean you PAID £1m for it. House prices are so high that many people cannot afford to move anywhere within the city. We wouldn't be able to afford our own home if we were to buy now. In fact we probably wouldn't even afford a 1 bed flat, let alone a family home.

And what a load of nonsense to say you should up sticks and move out of London if you don't like the tax. People have lives and families and kids in school and connections and jobs etc keeping them in London, not just a ridiculously overpriced property.

"Private and LA renters have to move home all the time. Why is this different? I can't really weep into my beer about people who have a £1 million asset being taxed on it. You can remortgage or sell that asset and move somewhere more affordable. It's not like they worked for the money - it's pure luck. "

^^ It's different because the costs of moving are far greater when it comes to selling/ buying property. It's not just a £1m asset, it's somewhere to live. It's actually cheaper in many cases to service a mortgage than it would be to privately rent a similarly sized property in the same area. Where would you move that's more affordable if your job requires you to be in London? Everywhere in commuting distance is expensive and you'd take a lifestyle hit in terms or hours spent on the train, not to mention eye-watering travel costs. And luck has nothing to do with it. Yes house prices sky rocket in London, but they start high.

Mrtumble - if they haven't sold the house, they haven't made a penny. They don't have £2m, they have something that they could sell for £2m, unless they do, and move away, they don't get the money. You could bring in a tax on the actual money they get, but the fact that my house has increased in £100k hasn't increased my income by one penny, just that if we sold we'd make more, we're not selling so it doesn't make any difference to my life.

It's this attitude that has created a lot of the economic problems we have in my opinion, looking at our homes values and thinking we are rich - houses are unlike any other asset, if I have a painting worth £2m I could sell it and carry on with the rest of my life as it is, no one needs a painting, but everyone needs a place to live. You can't sell, take the money and carry on, you either have to downsize, or move away, distrusting your lives.

We have never taxed potential money, only actual money. It's a dangerous road to go down, not taxing transactions or incomes or profits, but what someone else thinks your profit/income will be at some unspecified point in the future.

Some people cannot seem to understand that owning a house that is currently valued at 2 million does not mean
A) you have 2 million in the bank
B) you have a high disposable income
C) that when you come to sell the property it will still be worth 2 million

Yes, people could sell and move BUT they would have to move quite a way away in order to get a similar size property and avoid the tax.

This will mean this tax will affect those with less disposable income ( lots of examples on this thread) and not those who are rich in assets AND rich in income.

As others have said the higher rate tax was only supposed to hit high earners but due to inflation many middle management type jobs now fall straight into the higher rate tax rate.

I think Mary westmacott further up thread made a brilliant point comparing the tax to being taxed upon future inheritance before you receive it on an annual basis. A house VALUATION has no direct correlation to disposable income or future sale value.

I hear people on here showing a distinct lack of empathy that people might be forced to move away from family and friends.

the irony a tax that is meant to hit the rich will be unaffordable for many.

Another example from people I know, my old flat mate and his dw bought a house in 2007 for £500k, it's a 4 bed in Peckham. They were able to buy it because he'd made about £150k from the 2 bed flat I'd shared with him years before, he was lucky to have been one of those offered a 100% mortgage and parents who pushed buying as early a you can. I remember at the time he said he thought he had benefitted from the price rise and he couldn't expect this house to rise greatly in value. A few weeks ago another house in his terrace that's not decorated anywhere as nicely was put on the market for £1.3m. Who knows what theirs would be worth in another 10years.

In the meantime, their income has fallen as his dw has become a sahm, he works for a bank, but in a "back office" function so not earning the silly money. They are comfortable, but in a "private schools would be a financial stretch".

They are a settled family who aren't cash rich, they didn't buy an investment, they bought a family home. For most people, the value of their home is irrelevant unless they are thinking of selling.

Indeed. At one point we had two flats we let out. We sold them both at 50% less than we paid for them.
Another example zoopla has my daughter's flat at about in my view £40k more than it is actually worth.
Another - someone on our road has been trying to sell h is house at over £3m for seven years - yes seven years with that advertised price and only two houses ever near us sold at over £2m if you look at sold prices. So the council could say - ah house advertised on this road at £3m therefore all the houses are worth £3m.
I am very fearful local councils will just look at zoopla and say - ah all those houses are shown at ove £2m. Yet when you look at sold prices most of them are under that. Yes some have swimming pools (not mine) and all kind of mod cons but not all. you need to go into the house to know and I doubt the Government is going to do that.

Nor would it be a tax on the capital you have in the house. You might have a 95% mortgage including a big loan from family (or some from your employer - a friend of mine's employer in finance - gives staff loans to tide them over on divorces etc - he got £1m advanced) so what you actually own is 5% of £2m and yet you are taxed as if you have no loans on the place.

Taxing assets which are not your home would be fairer as those assets are available. Those people have real cash or shares or paintings or expensive cars.

Anyway just have to hope Labour don't get in. Milliband thankfully is so bad that might end up being the result.

exactly Mary. we live in greater London and our house has risen in value, we couldn't afford to buy it and the stamp duty on another property is 5% so the treasury are already making alot of money which they never mention. that hasn't risen so ordinary buyers pay alot of tax.

we still seem to watch every penny and have to find cash for our dds at uni as most people earn too much etc.

Looks like the LibDems have backtracked on it now too...going, funnily enough with a reform of council tax as a better idea.

Thanks, Sleep.
So at present neither Labour (34%) nor Tories would get in on their own. So they are likely to be getting power with the Lib Dems 6% (or possibly UKIP (15%) who have a higher share than Lib Dems in polls).

So a Tory Lib Dem Government next time would presumably go for the higher council tax bands. Tory UKIP might mean no change although I don't think the Tories would necessarily agree to form a coalition with UKIP.

I just don't think that a tax on your own home is right. When I talk about "home", this is "shelter". Not an investment. By taxing this, we pretty much accept that your "home" is an investment only. That may be true for foreign owners who keep it as that only, but not for many others.

Can we please introduce a tax for land ownership though (obviously excluding farmers, etc.). This may help against those landbanks that hold on to land to keep prices high.

Greengrow I think it's time to campaign for English devolution to keep Red Ed from wrecking England. Last time labour shafted the working poor as much as as the better off.

Surely it would be more efficient to just start capping bank balances and take wealthy people's money once it exceeds the acceptable limit, and redistribute it to more worthy people.

Surely it would be more efficient to just start capping bank balances and take wealthy people's money once it exceeds the acceptable limit, and redistribute it to more worthy people

I'm assuming that was a joke?

Yes.

TheLovelyBoots…

Don't suggest that. Someone will think that's a great idea.

I wouldn't object as I have a house but no savings even though Laour think I am some kind of a millionaire despite having a mortgage. Although of course I really would object on principle.
They did that in Cyprus - one off 10% confiscation of all money in bank accounts over £X.
They also have the annual wealth tax in France

yes we have very little disposable income just our home not an asset.

tax some of the property tycoons like the Blairs for example. They have plenty of money

Cyprus was my inspiration. Surely it makes more sense just to take 10% (or more) of "wealthy" people's net worth - seize their most likely illbegotten assets. This strikes me as far tidier than this mansion tax.

I am in favour of a much smaller state, much less state provision of anything and a 33% flat tax/NI for all (just under 33% is the current basic rate of tax/NI combined).

When Gordon Brown increased NI by 1% and then 2% uncapped he said it would fund the NHS for a generation. That was wholly untrue and typical of the state which always wants more power and higher income.

Also if you piss off the 1% of us who pay30% of tax (the highest proportion those better off have ever paid in the history of the UK) then you get less tax in, not more. there are all kinds of things I could lawfully do to pay less tax. i have never bothered. I could incorporate rather than being a sole trader et etc x 100 different things. I haven't bothered to date because I've bought into the welfare state, that we all get child benefit (it was taken from my this year - single mother of 5 etc because I choose to work and many single mothers don't who then get the CB), that there is a fair deal. Impose wealth confiscation taxes and that compact between tax payer and stage goes and it becomes a free for all. Much less tax ends up being collected. If my Labour get in and my house is held to be other £2m I shall ensure the state ends up with less not more tax over all.

Yes Greengrow I often wonder what those people who claim that the rich should pay a fairer share of tax actually think that share should be!

I agree totally that you and many others will simply alter their behaviour to avoid this tax: it will be self defeating and self destructive (the tax that is).

This "wealth/asset tax" is the edge of the precipice. The better off are leaving France in droves. How can you ever feel secure and how can you trust a government that thinks it is OK to simply place a retrospective charge - this is effectively what this is- on assets that have been lawfully bought and taxed out of taxed income.

Now Cyprus has the problem that no will invest in cyprus. There are a lot of unsold houses and bankrupt investors.

We need the rich

Of course that's what YOU want Green because that's what would benefit you. Should one of your children perhaps become disabled and unable to work after your death, they may be less in favour of a smaller state...

Germany is the healthiest economy in Europe atm and the top tax rate is 45% with compulsory health insurance on top - the state pays health insurance for the unemployed. People are not leaving in droves.