'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?

Their goal is for people like your mum to sell their house. Redistrabute wealth. They are socialists. Plus they need more houses to house all the immigrants coming into the country. The country is after all no longer our home, but an assylum camp for anyone who fancies it. We are at the bottom of the pile.

Surely, and especially for the house bought 15 years ago, the houses were still worth a lot more than the average house price at that time?

Unless London prices have only relatively recently outstripped most of the rest of the country.

May e it’s not relevant.

For everyone saying she should just sell - she certainly won't be able to sell for £2M as no one is now going to be buying a house at that price so this will effect the whole market - EVERYONE who owns a property! The housing market will now tank along with any incentive to do better for you and family.

They will probably defer to lay it as a duty on the estate I imagine. unless means tested but that would defer the purpose

Yep definitely. All those asylum seekers…coming over here….buying our £2m houses 🤣

I’m sorry but in the grand scheme of underfunded public services, and destitute families your mums £2million dilemma isn’t really an issue. If she really wants to live there just release equity.

Why do you think people who have worked hard all their lives to buy their home, don't deserve to live in the home when they become pensioners?

Poor OPs mum! Anyone would think that becoming an accidental millionaire would be a good thing.

I have no sympathy for anyone, regardless of their age, circumstances etc, living in houses worth 2 million pounds.

You do realise that if all the rich people who you claim to hate leave - who will pay the tax and benefits?

I do think they can live there. They just need to pay 0.1% of the value each year to do so

Nobody will be forced to move. The public consultation will cover proposals for a deferral scheme for cash poor asset rich home owners which I Imagine will be similar to the way the council puts a charge on a property when someone goes into care.

The new surcharge on a £2m property is £2500 a year, so even if the resident lives there for another 20 years they are looking at around £40-50k (depending on interest or however the state evaluates the deferred income). That's 2.5% of the value of a £2m property.

A large amount of stuff is only due to start in two years time - I have a feeling there’ll be a new govt by then…. 🤞

A £2 million house is a 3 bed terrace in many parts of London, that an elderly person may have bought for under £100k, on a modest income.

These aren't mansions, and why should the elderly be forced to move?

Also you’re not forced to move if you can’t pay your rent anymore under the new renters reform bill.

Really? So anyone can rent somewhere and stop paying rent and just stay there indefinitely?

I am saying this as somebody who will also be paying the additional council tax - I will not feel any sympathy for anybody who has to pay this. The country is on its knees, we need to raise money somehow and I think this is fair. If you cannot afford the additional council tax, then you sell up and move. It’s that simple.

It’s just really difficult for me to feel sorry for people with £2million+ assets when half the country can’t afford their gas and electric bills. If people can’t afford the very reasonable tax on ridiculously valued properties then they’ll have to do what poorer people do and downsize, or have it taken out of their estate when they die / sell as per the budget - which is more than fair. Boomers who bought their houses for peanuts constantly cash in on inflated house prices and much more whilst younger generations get shafted every time there’s a new announcement. It’s about time some of the wealth was snatched from the top instead, and from the hands of grabby children who can’t cope with losing some money out of their unearned inheritances. I feel much sorrier for people who work all available hours, after getting in to 60k of debt at uni only to hear the income tax threshold is frozen for the next 7 years so they’ll pay more and more tax for less and less real value income as inflation rises faster than their wages to be honest

Well, they won’t be ‘ accidental ‘ millionaires anymore once the Labour Party have taxed them out of their homes! That’s if there is anyone left who has the money to buy it, pay the relevant taxes to buy it and the new mansion tax on a yearly basis ( and more council tax too)
Ive no skin in the game, I don’t own a house worth as much, but you can bet money on it being introduced on a sliding scale eventually until it becomes the norm.

Because they can’t afford to live where they are. Alternatively they could release some of that £1.9 million unearned equity.

Well exactly, if they’ve bought it for £100k then they’ve made tax free profits of £1.9m on it. Why shouldn’t they give a tiny proportion of that back?

"It's not exactly her fault that the value of the property increased so much since my parents bought it all that time ago."

Are you honestly suggesting you would prefer the property were worth considerably less, just so she doesn't have to pay the £2500?

If someone is a tenant of a property worth £2M, who will be responsible for this mansion tax? The tenant or landlord? Just musing as I'm a tenant, albeit in a tiny flat which is most definitely not worth £2m 😄

On that basis, no tax could ever change.

This is laughable and absolute rage bait.
I hope you're not expecting people to feel sorry for your 'family/friends'.
It can be rolled over and paid as death duty instead. I guess you'll be losing some of your very lucrative inheritance.

There is no chance of Russia marching in, please come off it