'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 really disagree with this. I think it was wrong to raise the pension when everyone else is having tax thresholds frozen and most likely restricted wage growth. There is now way I’m getting a 4.8% pay rise next year. I’ll be lucky to get 2%.

I also don’t think you can play out a narrative of all pensioners having worked hard all their life. I just don’t think that’s true. My own mother worked for a maximum of 6-7 years before having children and never went back to work. I’ve worked much harder than she ever did.

Why, because it is her home, she has support, she has friends. She is frail. Shut up with your why can't she move. It's a idiotic thing to say.

A lot of ex council homes where I was brought up are going for 500 k plus , they are nothing special tbh.
All this was mooted in the 1980s with the great council home sell off, but people just saw ££ and many moved away and made a mint. Not everyone ( my parents and in-laws didn’t ) but it’s all added to the rising costs of home ownership for people from more modest backgrounds etc. A double edged sword.

This sort of thing makes me impatient. You didn't buy your house for £1.4m but you presumably got a very large sum when you sold it, even if you had to pay off what was left on the mortgage and/or use a fair chunk to buy another home. You can surely see that having that amount of money is an amazing asset, which most people won't have. It's a windfall. You did absolutely nothing to earn it. Why shouldn't a small part of it be used to benefit other people through the tax system?

@GasPanic - what are you on about?! I don't know anyone whose salary has increased that much in a decade!

I really disagree with this. I think it was wrong to raise the pension when everyone else is having tax thresholds frozen and most likely restricted wage growth. There is now way I’m getting a 4.8% pay rise next year. I’ll be lucky to get 2%.

I also don’t think you can play out a narrative of all pensioners having worked hard all their life. I just don’t think that’s true. My own mother worked for a maximum of 6-7 years before having children and never went back to work. I’ve worked much harder than she ever did.

She doesn't have to move. It can be paid later, whenever the house is sold. Plus, not coming in for a few years. So no need to pack her bags, just yet.

She won’t need to sell up. If she can’t afford it, any accrued payments will be taken from her estate when she dies.

Strange, because that's approx. the amount of salary you would need to get a £2mill house at 4x income.

I don’t think it’s an unreasonable step to introduce this. Lots of countries tax assets in this way. There will time to figure out a solution before it is implemented.

Almost as though you wish it on those awful hard workers who’ve done well.

No I don’t. I was responding to a poster who said it isn’t a contributory based system. It is.

What salary is that?

Is shame a finite resource? Is empathy? Maybe you can spare some for the ones who will be hit by today's budget.

I wish that any government ( it won’t be this one) does something really radical about home prices.
Im definitely not holding my breath and I’m really not jealous at all, but if someone could make it a more level playing field , wouldn’t that be a great thing ? Not sure how it could happen, but it wouldn’t be popular with many I’m sure, but just make things a bit fairer all round maybe ?

But given the proliferation of 2 million pound houses in London and the south East, and the fact that the "very rich" are going to be penalised for living in one, will there be enough of these very rich to go round?

Then the " mansion" tax is a misnomer

Yes. Yes it is.

Maybe this is an unpopular opinion, but if the mansion tax leads to a general downturn in property prices in london/ SE surely that’s no bad thing?

Unaffordable housing benefits barely anyone in the long term, except a few landlords, professional investors and inheritors.

Bless you - did you think it was a tax based on having a large house, regardless of value 😆

Oh no

property prices might fall. What a shame

But it could be small. Where did the OP say it was a big house

The posters relishing this are really dismaying, it really is the politics of envy.

Move. Christ if I was on my arse then I would have to down-size. Why do people in mansions need special treatment??

For the reasons given in the original post!