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?

Perhaps a CGT is required on the sale of primary residence. Just a thought. Again, no vested interest as I would be affected by that too. Just thinking that there is a lot of unearned wealth from property and it is not productive in the same way that income from work is, therefore still maintain lower income taxes is the way forward.

CGT instead of the mansion tax and SDLT or in addition to?

I do see what you mean MrsDe about rich people not bothering what the tax is. But that would apply to most taxes. I don't think there can be many low income families living in houses worth £2m. But it depends what you call low income.

ihategeorgeosbourne

But a capital gains tax on primary residence will lead to people not being able to move unless they downsize.

CGT instead of both.

ihategeorge - no, they are not clearly 'well off' or rich, they are better off than someone without a house, but then I bought a modest 3 bed outside london, I am better off than someone with no house, doesn't make me rich. If it goes up in value to the extend these people's houses have, doesn't mean I'll have extra money while I live in it, just if I sell. At that point, it would make sense to tax the profit, to tax the actual money, not the potential money.

We couldn't afford our house if we were buying now - the 2 couples who moved into our road this year have much better jobs than DH and I had (and bigger cars on the drives!), it's becoming a much more affluent street in only 5 years, and this is outside of London.

I am surprised by the amount of "i'm not shedding any tears" type comments.

The OP is not about whether people should shed tears it's about whether this tax unfairly hits Londoners and the south east.

I think my point is that there are people around me living in £1m houses (so not £2m I agree and they wouldn't be affected by the mansion tax at the moment I guess but who knows?).

But they are not rich, they are low income families in London - nurses, teachers etc who just happen to have bought a few years before regeneration in this area.

It's a mix of people and professions where I am. If those people had to move because they couldn't afford the mansion tax then who would buy their house? Not another teacher or nurse that's for sure. The area would be overtaken by people who can afford to live here and so removing a mix of professions and families. I honestly can't see how it would result in lower housing costs. If someone can explain why they think it might help I really would listen. I'm in London and would love to have lower prices as I want a bigger house but can't afford it!!

I know what you're saying goodness, but what is the alternative, apart from higher income taxes? Also, it would have to levied sensibly and maybe exemptions where people have to move for work etc or are moving to a more expensive area. I don't know what the answers are, but what we currently have doesn't seem very fair on many people either.

Mary has made a great argument.

Property market fluctuates, sometimes greatly. It seems crazy to tax someone on the possible future worth of a house. It might be worth 2 million now but when they sell it may not.

i hate george

I think the other option is to create some more revenue from corporations that currently legally get out paying any tax.

Also, that's another thought. Usually the £2m houses would be bigger houses. So a family on a fairly middle income and looking for a bigger house would also have to move out. I know this is happening now but it would just make the situation worse surely and London would become even more secular?

I agree goodness. What are the chances? [cynical]

none or less ihategeorge

Just sort out the bloody council tax bands, I'm sure we could go much higher than H.

Mrs De - I think you are correct that long term it would have no effect on reducing house prices. I think we will end up with a weird artificial bubble at the 2 million mark where lots of houses will be just under that and then others will sell at 2.5/3 in the same way as happens with the current property tax buying levels.

I can see this affecting a lot of my older colleagues who bought in areas like Wandsworth 20 years ago when it was cheap and rough. Compared to their salaries, the price of their houses have rocketed. BUT it isn't real money, is it? Until the actual house is sold. Yes they are lucky buggers, but if they are then forced to move away who is going to buy their houses? My guess would be the super super rich or foreign investors. So they drive out the poor with the HB cuts and the MC professionals with the Mansion tax. Soon no one will be able to buy or rent in Zones 1 and 2 any more.

1 bed flat under 1000 sq ft for £3 million anyone?

www.rightmove.co.uk/property-for-sale/property-32345826.html

It is bonkers

I don't think the mansion tax is fair, no. I think income tax is too low and CGT too. It would be fairer to tax people properly when they have the money, not tax people whose homes have appreciated accidentally. I know plenty of people living in houses of >£2 million who bought them for

New taxes don't always raise revenue and often result in unexpected consequences, as people attempt to avoid the tax. My London property is not worth £2m, but if it was, I would probably sell it and buy two cheaper properties; a flat in London, to keep on the London property ladder and to use for the working week, plus a house outside of London. If others did similar, this would result in more second home ownership, and even less available housing. So this might be an unwanted consequence of mansion tax. I can also see more houses being split into flats to avoid the tax. So for example, if you live with your elderly relative, or grown up kids, you would legally separate the house into two flats so it wouldn't be worth £2m.

It would also probably drive property prices down due to many people trying to sell - but that is probably a good thing in all honesty (although not for me as a London home owner).

Owl

Re your remark that you can be concerned about more than 1 Govt Policy at a time -

I did say:

"Two wrongs don't make a right but I know which one I am more concerned about happening in our society."

so, it's more concerned, not just concerned about 1.

Mindreader

I think your first words "cry me a river" show that you don't not understand the consequences of this tax. It is not just going to have consequences for those people it hits but if they are forced to down size it just heats up the market for the lower end of the market.

I also find that people who show a distinct lack of empathy for a families who may be forced to move potentially away from their family, friends and support networks and further away from jobs simply because they are deemed to be wealthier than many are showing their true colours.

It might drive the price of £2m homes down... To £1.9m.

But all those nicely located and decent sized flats would go right up as load of people do what you just suggested and keep a london flat and a country home. Which is far worse.

Whois

We have no idea how they would decide what a house is worth. I don't think it will be a simple as people just keeping houses under a price point. I am sure it would be set retrospectively.

In any case I don't see how they can set a price on a house over a long term when prices fluctuate.

That actually is the point the tax is not based upon actual income or purchase price that someone has agreed and bought into, it will be based upon a potential price of a house whether the owner intends to realise the cash at that price or not.

It is clearly a tax focussed mainly on the South East
Here is a simple test
Put any of these major cities into Rightmove,
Birmingham
Leeds
Liverpool
Manchester

Select this area only i.e. the whole city
Set minimum price 2m
See how many properties come up

This is Birmingham's result (12 properties)
www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E162&minPrice=2000000&viewType=LIST

Now try the same thing with any London borough
This is Hillingdon (which is not one of the central expensive boroughs) also 12 properties
www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E93959&insId=4&minPrice=2000000&googleAnalyticsChannel=buying

Camden has 326
Manchester has 4

YANBU.

We bought in London four years ago. Our house has doubled in value in that time, simply because of where it is.

We are not hit by the tax, thank goodness, but lots of people will be who are in similar situations, just with higher value properties. That's not fair.

And why is it ok to slag off high earners?? If such vitriol was directed towards low earners there'd be an outcry. Most high earners I know have worked hard their entire lives to get the education needed to work in the high-paying jobs, and they still work insanely long hours (plus paying huge amounts of tax, without which the country would grind to a halt).

Slagging off people like that smacks of pure jealousy.

harrow I think some of the people who find it impossible to show empathy to someone purely because they are better off than them, shows more about their own personality than anything else.