'Mansion tax' - what if you just can't pay it?

[shellinthesea]

My elderly mum lives in a London house worth about 2million. She's been there for over 50 years, and is physically and mentally fragile. There is no way she would EVER want to move, the house and her neighbours are her whole world. She has no spare money - at all. (Neither do I, before anyone suggests this!) How is she supposed to manage this? It's not exactly her fault that the value of the property increased so much since my parents bought it all that time ago.

I also have a friend, also in London. Both parents sadly died in an accident about 15 years ago, and she used her inheritance to buy a family home which has also increased massively in value. It's probably also worth over 2 million now! She's a single mum on a lower income with 3 kids who very happy at their local school and within their community - what's she supposed to do?

It's just not as simple as 'you live in a high-value house, you can obviously afford to pay several grand a year' as RR seems to think. And for anyone who is about to say 'oh tiny violin, their houses are worth two million' - both of these situations are complicated and quite sad in many ways. Neither my mum nor my friend can simply just sell up and move...anyone have any thoughts on this?

I don’t think they are going to be brought in until 2028, and I think I read that they could be postponed until you sell or die.

Why can they not just sell up and move?

I feel the budget is very short sighted. This is a good example. I also feel for graduates who will not have a 4% rise in their meagre salaries. No point in uni debt for 2/3 thousand more per yr than a minimum wage job. Very shortsighted and a bit…dim

Equity release?

I find it all odd and clearly targeting London and home counties. I pay 3.5k a year council tax for a £180,000 house.

As simple as that eh? 😂

Maybe read the OP again? It answers all your questions.

OP the first post nails it — there will be a way to delay these payments if she can’t afford them, until such time as the house is eventually sold. Tbh it could have been so much worse

rarely a good idea!

In your mums case if she truly can't afford it she can apply fir council tax benefit and if she doesn't qualify she will have to move

Of course they can just sell up and move! It might not be "simple" but buying/selling houses isn't simple for anyone!

Sorry but millions of people have to move away from their family and friends who are "everything" to them because they simply can't afford to live in their dream area - and they aren't living in 2 million houses while they do so!

Your mum could look into an equity release scheme, sell some stuff to make up the £2500, take in a lodger, you (and any siblings) could pay the money on her behalf given you will presumably inherit millions. If she's so physically and mentally frail that she cannot possibly move house then how much longer will she be able to live there alone anyway?

It’s hard and I’m sure I’ll get a kicking for saying this but…

we’re skint. As a country we’re skint. The NHS is on its knees. Schools are on their knees. Our armed forces are underfunded and Russia potentially marching in.

The money has to come from somewhere. And everyone agrees we have all these problems to solve but when it comes to them having to pay they don’t like it.

Reality is, if she can’t afford it she’ll either have to move or get a lodger. Both options suck, I agree. But people dying on stretchers outside A&E departments also suck. Violent offenders getting released early from jail because we can’t afford to keep them in sucks. A lot of things suck. And in the scheme of things people being pushed, via taxation, to vacate big properties and free them up for families is one of the things that suck less than other things, though I appreciate massively impactful if you are impacted.

For my part I hope this is the push for my elderly parents to move to a smaller more manageable home rather than rattling around a big house they don’t even go into parts of one year to the next.

Lots of people who downsize didn't want to move, but circumstances meant they had to. It's always better to do it before it becomes impossible, which obviously doesn't help your mum now. If/when it does actually come in, could you pay on her behalf, making clear notes/records, and then claim from her estate when she passes?

she can postpone the payment until the house is eventually sold; this was very clear in the budget.

doesn’t come in until 2028 anyway as will
take years to revalue all the homes….

Is this also a tool to try and stop London prices from continuing to climb?
I suspect a lot of people living in expensive houses don't necessarily have spare income...

Errrrrrrr 🙈

Not simple, no and possibly/probably very upsetting for the two families mentioned, but i don't understand why it can't possibly be done? If a house is worth 2 million, get it on the market and find yourself somewhere cheaper...

Tough. Sell up.

Errr what?! Are the estate agents all shutting down??? Honestly.

There you go @shellinthesea nothing for her to worry about, bit of extra paperwork for the solicitor and she can carry on living where she is and bill be settled from her estate eventually.

No one needs to be evicted.

If ‘just move’ was posted re someone complaining about ‘bedroom tax’ they’d be flamed and reported and probably banned!

This. An elderly woman living alone doesn’t need to be in a £2m house. If she can’t afford the mansion tax, she will have to make other sacrifices or move. It’s a wrench having to move for financial reasons, but probably less so for her than for a young family with kids who have to be uprooted from schools, which happens all the time and is an unfortunate fact of life.

Are you stumping up more?

I think it’s so unfair. Your mum didn’t purchase a £2million house. And yes, it makes such sense to sell and downsize but the emotional damage and stress is real. She shouldn’t be coerced by a system into doing this. It should be her choice.
I sold my £1.4 million house (I didn’t buy a £1.4 million house but mine became that over the years). It’s not all about making money and sitting on profits. Your parents bought a family home, a forever home, not an asset. People in my former neck of West London did nothing but talk about their home as an asset, endlessly doing up their homes, raising their kids on a building site then not having play dates because they don’t want to mess up the palace. Inflated property prices have people feeling resentful towards people like your mum and there will be plenty who will delight in taxing the ‘wealthy’, only they’re actually asset rich and through no doing of their own. Your mum shouldn’t be forced out of her home because of a shortsighted policy. I’m not in agreement with this whatsoever because there are so many people like your mum out there who will be shoehorned into living situations they don’t want.

Borrow against the house and pay it that way?

Or sell-up.

How do people pay council tax now do you think? If your circumstances change and you can't afford it in Band G anymore, you have to sell-up.

I do have some sympathy for people in that position to be honest even though in general I don't think the budget was terrible. We will be worse off personally but many others, the poorest should be better off. I do know though that some will be in properties that they couldn't afford now if they had to buy them now and might really struggle with a mansion tax. I still think it's a good idea but I can se how some people who are not rich could be affected.