'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?

Then they have no choice but to sell. Same as anyone else who can’t pay bills.

Reform will get in on policies like this. Which is exactly what has already happened in rural councils with the farm tax. Labour doesn't believe people should own property. Only the mega rich will be able to pay. When their own housing minister has to resign for not paying a clearly payable tax on property. Animal Farm policies.

Won't someone please think of the millionaire's lmao..... ppl cant heat there house or feed their kids and you are complaining about a tax on a house work more than 2 mill!?

🎵lifestyles of the rich and the famous always complaining. If moneys such a problem they all
got mansions think we should rob them🎵

Probably because "it would affect my inheritance" garners less sympathy than "poor old widder woman forced from family home"

Equity release.

Everyone saying suck it up richies doesn't seem to understand just how much money is leaving this country. People don't have to live in the UK. Many will take their assets to other systems and already are. Who will pay for the services then?

asset rich is still rich

We should all move out of England. Things are so crazy and glum here

Off you pop and don’t let the door hit you on the way out. Exit tax should also be a thing

Most middle class people I know pay for private healthcare because they have to work and can’t wait two years or more for a knee replacement or back ops on the NHS. Many are trades and it’s an occupational hazard some of the time from a lifetime of working.
Definitely not a burden and will probably be pulled into this ‘ mansion tax ‘ over time too.

people will just set their wealth up abroad.

The average middle/high earner can’t do this without another passport ( thanks to Brexit) so it’s not quite the flex people think it is… we’re off to Dubai! Are you though? It’s expensive.
We’re moving to Switzerland! Another tax haven No, you’re not… you don’t earn enough!
Europe then! Depends - Portugal will have you,
some other countries? Tricky depending on nationality/ money/ jobs.
USA - good luck with that! Oz - ditto.

Don’t worry I reckon this is going to tank the property market and your Mother won’t be liable for anything.

Well, hope for my kids ever owning a home then, so not all bad!

Dubai is so popular because of the tax laws there ( of course )
You have to pay for a visa and some things are not cheap, but I am surprised how many people are living there or thinking about it especially young people.

It is a lousy idea for those inheriting- but for someone old and frail who is secure in her neighbours when family live miles away, needs to pay bills and actually eat (believe me I know!!) it works

I wasn't threatening to leave and the policy doesn't affect me actually but the consequences are entirely obvious. Lots of people aready hold assets off shore and so the UK can't tax them. Obviously it isn't possible to hold people in the country ransom to an exit tax. Capital gains tax will be the tax as they sell up and leave.

The Tax for a £2m house is essentially £200 per month. Most first time buyers have faced that kind of increase and more in interest rates. I honestly don’t understand why anyone could possibly deny that this is a fair tax. If you are “stretched” and living in a £2m house, you have a multitude of options. Something most of the country don’t have.

Other countries DO have taxes too… that’s what gets me when people claim they’re going to swan off overseas to a country where they have no family, no friends, don’t speak the language… they DO charge tax on income, tax on property, they have messy politics, issues with immigration…

How do you think it will tank it? Let's say 2m properties won't sell as no one wants to buy a problem, but what's next? There are not so many of them anyway.

Unless people are already dual nationals

I see this is a long thread so someone will have already said this to you but generally the older you are when you move the increased risk there is of dying very soon after you move.

Many can afford it, but I do feel for people like this, and for anyone to say sell up and move for no one this is easy! For some like you mention it’s very tough and costly. Where do they move to? Your Mum may have to leave her friends behind, I have seen elderly relatives have to do this and they’re never the same and never really settle. For young children may have to leave their school.

For your Mum I would be wary of equity release, maybe an interest only lifetime mortgage (ie just pay the interest every month), and borrow a sum of money to cover an amount of years. Probably cheaper than moving.

for the young mum, I have no idea and sadly moving out to a cheaper area (that then pushes the value in these areas).
I know of people that once lived (don’t now) in small two up two down houses in a working class area of London that are now worth millions.

So am I as it’s a fucking shit hole, built on slave labour where you can’t be outside 7/8 months of the year and the human rights laws are awful and it’s full of the type of people you’d avoid at a wedding.