'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?

@Wickedlittledancer Bingo! Knew we would get there in the end.

Housing wealth has been massively under taxed for a long long time and is a massive source of generational inequality. Many countries have property taxes and indeed we all pay a form of property tax (even those wo own fuck all property) in the form of Council tax. So I think sharing the burden a bit more fairly rather than envy is the impulse here.

Not from the posters relishing it.

I doubt you’ll get much from it, £400m in pp. and that’s in years and subject to people challenging valuations.

We just pay NI for current pensioners. That's all.

How are either of these situations different from someone who rents? They may well have lived in house for many years, raised families etc but if they now can't afford the rent/ running costs, they'll have to move.

Or people who own cheaper houses? If they can't afford the running costs, they'll just have to move too.

It's sad, and can be difficult, I agree, but if someone is living beyond their means, they will just have to make the change.

No one is asking for them to have special treatment.

Families who have more kids than they can afford are getting special treatment though, so why not old people who had no influence on how much their modest house has risen in price? They didn’t choose to be in this position, unlike parents.

I’m not envious of people in very big houses. We can all dream of one or a big win on the lottery, but all I can see is more money to spend on it , more cleaning and higher utility bills. The extra space wouid be nice , but if it’s your home , it’s your home and nobody should be forced out if they don’t want to move.

I"m sure I read somewhere that there will be workarounds for people in this situation. I think that the amount owed will acrue and be paid when the house is finally sold or bequeathed.

We'll have a new government before 2028, this lot won't last and the next one will scrap it.

Will they? They might stagnate around the £2m mark. However, below that, everyone looking to live somewhere nice but avoid the £2m threshold will be fighting over cheaper properties they may have otherwise left to people on more modest incomes. And there will no doubt be a lot of people buying up more modest/modestly priced properties and extending them, pricing out families looking for starter/down size/smaller properties.

In London a £2m house is not necessarily "very big." It's shocking how little £2m gets you. A friend in the north whose house is much nicer and bigger than most of my friends in London recently sold hers for someting like £750k, very top end in her naice town. This is effectively a London tax, clobbering people who did nothing but buy a house and choose to live there and who also pay way more tax already than the average Brit. To really be a mansion tax as people on here seem to imagine you'd start at about £4m.

Tough, sell up to enable those who cannot stop breeding, the politest way I could think of it, to be subsidised in their 'hobby'?

Tax shouldn't put someone who was living within their means unable to live within their means simply because of a novel tax, having not changed their behavior. That's a poor way to run an economy.

Same with businesses. A viable business or school should not be caused to fail simply by a novel tax.

@EasternStandard TBH I agree it won't raise a huge amount (I was in favour raising income tax myself) but think it breaks an important taboo, moving some of the burden of taxation from income to assets, particularly housing wealth. It needs to be done.

But maybe the best option in this case

People choosing to have more than two children are being helped. The mansion tax is paying for higher welfare bills. Some may think this is fair game, but it feels wrong to me. I suppose you can’t please all the people all the time , but it’s how it’s being seen and won’t make any one in the current government very popular.

The largest portion of the welfare bill by fair (and growing all the time) - pensions. But don't let that stop you dunking on poor kids.

There are a lot of physically and mentally fragile people who would also NEVER want to move who cant eat or heat properly, they dont have the option of selling high value properties to find a solution.
Its simply life at this point.

Why though! It’s so unfair - why should OPs mother be forced to live out her last days anywhere else than her own home!

it’s a disgrace….I’m a long time Labour voter to - have never voted any other way.

Im voting greens next, it’s their own fault!

Why should they have to?
It's their home - that has now been given an arbitrary value to raise money.
It stinks
(And no, I don't live in a £2m home)

I am not a big fan of council taxes being used to cover services other than the neccessary waste collection, street lighting and things essential to housing and community needs. Being taxed on having somewhere to live is odd. Why not tax luxury yachts?

Hopefully there will be a new government before this kicks in as I think hard working people will be pushed past their tax tolerance.

Personally I would

1. Make it much higher - a percentage of the purchase price BUT
2. Only for houses purchased from now on pending a proper review of Council Tax

Sounds like a good idea for OPs elderly mum to utilise her assets to free up some spending cash if she has "no money at all" and continue living in her own home she feels comfortable in for her final years. It could also support home help and private carers in her home.

Not so good for those who want to get their hands on her assets when she pops off this mortal coil - but those same people should be the people who want her to have the best possible in her final years.

I don’t care how many bedrooms your house has or whether you live north or south, £2m is still a really expensive house.

^^ This