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?

If we pay mansion tax for the remainder of our years (let's hope 40 or more years), along with council tax - all rising in line with any increase in house value and then we die and inheritance tax is paid on the final value, isn't it possible that more than 100% of our house will be taken by the government?

If so, I regard that as unfair. I believe in social welfare and redistribution of wealth. We have never avoided tax and have paid plenty of it over the years, but I do think our house is our home and doesn't belong to the state. The mansion tax would effectively repossess it from us over time.

Of course, there are plenty of foreign investors, hedge fund managers, lawyers who own houses in our neighbourhood who can easily pay the mansion tax and will hang on to their homes. They all arrived in the last 5 years. We've lived around here for 30 years.

Ironically, we are the only house left around here with an NHS worker in it - the very institution they want to protect. Good luck to the central London hospitals once all NHS workers have all moved out. I think this will be true for some teachers and others in working in the welfare state too.

Should just sell up and spend all the cash and then live of the state as pensioners?

"The mansion tax is different. It is a tax on an unrealised gain or indeed even on a property in which you have negative equity and have made no gain."

No it's not.

If you buy a property for £3 million and it's still worth £3 million then you pay tax on that.

It's a tax on the VALUE of your property. Which is what council tax is, the only difference is that council tax is capped.

If this wealth tax is passed, I'll apply to building control to have my house broken into two flats. Is there any reason I couldn't do this?

TheLovelyBoots I think everyone should pay CGT on their principal private residence. But when they sell - not before.

minipie, would that work in practice?

Suppose I earn £50,000 a year. I sell my house for £500,000 having bought it 15 years earlier for £300,000. I pay CGT at 28% on my gain - £56,000.

I want to buy another £500,000 house and have to pay 4% SDLT - £20,000.

So it costs me £76,000 in tax to swap similarly-valued properties.

I wouldn't move.

written - there are plenty of non-doms who use our roads, A&Es, police service (to protect their property) etc. This idea that you can live somewhere for any length of time, or own property somewhere, and yet use zero state-provided services is a fallacy, I'm afraid.

The non-doms might play the system to be officially resident in another, lower tax country but plenty of them spend a fair amount of time here.

grovel two answers

1. I would abolish SDLT
2. without SDLT, you'd still be making 144k of profit on your first house

Add 144k to whatever deposit you had when you bought the first house (plus any mortgage you've paid down in the meantime) and you have a good chunk to put towards your next house.

It's true that you might not move to a similarly valued property. But people already don't do that, because of the stamp duty and other moving costs.

Also, if you didn't move to a similarly valued property, you'd just be building up more capital gain on your first house, which you'd be taxed on when you eventually did move. So by not moving, you wouldn't save the CGT, you'd only defer it.

But you might not sell until you die. My parents owned their house for almost 50 years and died, literally, in the house so if there were CGT they would not personally pay it.

(I agree that paying mansion tax on a house where you only own £100k of the equity is the same as paying council tax for services where you rent a place although I don't think you use extra services if your house is bigger and I was a huge supporter of the community charge which existed before Council Tax which was the same payment by everyone as we all use the same services. That was much fairer. Council tax is just about okay although I'd argue those with bigger houses tend to use fewer council services so should pay less council tax than those who make more use of council services and of course that the mansion tax is beyond the pale).

but in that case your parents didn't benefit from their house's value increase Green so why should they pay tax on it? Their heirs, the ones who will benefit from the house's value, should pay it.

I doubt you use less of the council services council tax funds Green - do you produce less rubbish to be collected?

MrTumblesBavarianFanbase - My partner and I most definitely produce less rubbish than the families on my road for the following reasons:

1. food waste goes back into my garden as compost
2. we both work long hours and therefore most nights end up eating lunch and dinner at work so what food we do buy for when we are at home is very little.

Our fortnightly rubbish collection fluctuates between one carrier bag to one bin bag.

Contrast this to families near me where they regularly have more than 2-3 bags full of waste.

Come on. Rubbish collection comprises a very small percentage of council tax expenditure. High rate tax payers use relatively little council services.

Yes, mansion tax would be an unfair tax on the South East. Just like SDLT. The latest copy of the Economist has a bar chart showing that just one London Borough (admittedly, South Kensington and Chelsea) raises more SDLT than the whole of Scotland, Wales and Northern Ireland put together. We in London have to pay more for our housing than those elsewhere and then have insult added to injury through having to pay more tax as well which is then disproportionately distributed to, you guessed it, Scotland and Wales and Northern Ireland. Mansion Tax will similarly affect the South East disproportionately.

Alternative plan: get rid of tax exemptions for non-doms on properties in the UK so that they pay CGT on non principal private residences same as we ordinary citizens of the UK have to do, and also increase the number of council tax bands upwards so that those in bigger properties gradually pay more but it is not biased against the SE (these don't affect one region more than another as, say, in a particular London Borough, ALL the houses will be worth proportionally more to raise the same fixed amount of revenue so rates per £1,000 value will be lower IYSWIM)

Yes, if you look at the cost of fostering one child (£60k a year?), dealing with one of the most troubled families with support from a social worker and all the other things that tend to be used by those not so well off (social housing etc) I am pretty certain the less you earn the more a drain you are on local council services so arguably should pay more than those who don't pay. We even pay on this private estate a charge to have the street bins emptied and the verges mowed and we paid nearly £50k to resurface one road this year, but instead of a whopping great discount on the council tax we pay top whack £3500 a house with the risk of the future mansion tax.

We need a toll around the M25 to stop commuters benefiting from london weighting allowance and higher salaries but then scarpering back to the home counties and giving nothing back. Londoners getting shafted and carrying everyone else as usual. There, touch paper lit...go for it.

I was a Londoner for many years but the 'burden' of carrying the rest of the country (cough!!) became tooooo much, so I left.

Isn't the general higher cost of living in London mostly due to capitalist, free market economics though? Scarcity e.g. of property etc pushes up prices. This is the exact same free market economics which drives the City of London and most of the London financial sector which many of those complaining about the mansion tax etc are happy to work in and profit from...??!!

I would argue the markets are nothing like free enough. Wages are not free (minimum wage). I know the Government says it leaves the bank of England free to set interest rates but I am not convinced 0.5% for so long is a free market. Bailing out banks was not a free market at work.

I don't have a problem with the market meaning more people want to live in London so rents are higher and you can't buy the £1 houses you sometimes can on sink estates in the North. The mansion tax however is capital confiscation of assets acquired. In fact i see that Labour politicians are springing up all over today against it so may be it will die a death. My attempt to get the zoopla price of my house down seems to have failed. It went down, then up even though the prices it has all houses near us at are much much more than the houses are actually selling for.

Greengrow - do you have an issue with the National Minimum Wage then??!!

My attempt to get the zoopla price of my house down seems to have failed
How did you attempt this?

also, why would zoopla be relevant? It is just a website, not a government institution dictating law, no?

Perhaps the poster views it as a proxy for how the government might value her house.

There should be a high tax on properties over the median value.

If this is unfair to those in the South East or favourable locations it will simply drive prices down as employers move out. That's good for everyone, surely.

inconceivable where did you go? Are you better off now? Genuinely interested. Lived in London all my life and getting fed up with the village snob mentality of some of its inhabitants now.

I have a friend who spent 18 months in the Christie with cancer, 2 months of which she was in a coma. She has got the all clear but has been left physically disabled by the episode.
Her mum had been staying over to care for her.
She is now being subject to the bedroom tax.
She had a good job before getting ill and is not a dosser or a scrounger. In fact she spends all her spare time fundraising for the Willow Foundation that supports young people with cancer.
The fact she is now losing her home and cannot have a carer stay is unfair.
If your biggest problem is the bloody mansion tax, you want to walk a mile in her shoes.
Pathetic really.