'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?

And how does this revenue affect thos epeople and improve their lives? It doesnt

I was a big labour supporter, always have been but one shocking thing has been the absolute refusal to deal with the lack of social housing and private rental caps on rents. They didnt bother under Blair and they're not bothering now

Stop right to buy, build build build social housing. Compulsory purchase developers lands, rush it through court, get social housing built on those sites. Ignore NIMBYS.

They wont do that and their supporters would be horrified in their leafy suburbs to have the great unwashed move in

The mansion tax is simply theft. It is a tax on an asset that you have already bought and paid for and paid stamp duty and council tax on. I think it’s immoral and a lot of older people will be caught by this. No taxes need rise of the government were prepared to look at waste. No economy ever taxed its way to growth.

If this isn’t coming into effect until 2028, the threshold will have likely dropped from £2m to 1m by then. The ‘mansion tax’ is a very mean tax of envy and will open the door for lots of other similar taxes

I would say it’s equally theft to expect to receive the entire value of the increase in property prices without being taxed on it. I’m guessing OP’s mum maybe paid 200k for her house when it was bought, yet if she sold, she’d get the massive massive windfall for free. I find that grossly unfair to be honest. It’s not like she’s worked for that money.

The only migrants moving here and buying up £2 million homes are the millionaire and billionaire friends of Reform and the Tory party.

Oh boy, the people who vote these scumbags Reform in thinking 'I'm finally getting my country back' or 'They care about me!' are in for rude awakening when they realise Farage and Tice wouldn't piss on the white working class if they were fire. You think you're at the bottom of pile now, you wait till welfare and the NHS are dismantled and huge tax cuts given to the global rich to plunder this country further ( as it has been under the Tories) But not to worry I'm sure Farage will set up a ICE force and you can watch them on the news raid take-aways and hotels looking for illegals and make yourself feel good about that, while becoming poorer, just like the working class in the USA.

Yep! People seem to forget that the biggest chunk of benefits by far are pensions.

These clowns will be long gone before any of these new rules will apply. Hugs to you and your mum. @shellinthesea

Any cliff edge in a market is a bad idea and creates anomalies.

Will this tax put people off buying houses in the £1.7m bracket upwards for fear of incurring the tax in future years. Increase the competition in the £1m - £1.5m bracket?

I can see this doing some odd things to the market for larger houses further out from London where prices are lower.

I think it’s nice to hear a budget helping the poorest and charging the wealthiest to pay for it for a change. Agree it may seem unfair for outliers like your mum but I’m sure she said there will be help for those who feel unable to make the payment straight after.

Presumably if she is paying council tax, heating bills etc for a 2m home, she does have spare money - or at the very least she's not poor. She may not want to move, but sadly she may have to. Can she downsize but stay in the same area?

As for the friend, it sounds like there's no reason they can't move into a smaller home in the same area, if those are available?

Are you for real? You really think you should have to lose your entire world, family, community, life just because you happened to have a house increase in value?

This 👆

Downsize

but it’s not it’s going to hit the middle earners most yet those who have chosen to have children they can’t afford or those who have decided they “can’t” work and going to have everything handed to them

This isn't touching the wealthiest - they'll never tax them. It's affecting people who have worked hard and sacrificed to give themselves and their families a good life, and are now expected to subsidise those who didn't.

I have not read the whole thread, so please forgive me if this is a repeat from another post.

Has your mum taken out equity in the house? She has age on her side to get equity, and you could pursue that for her. That would give her the money to live well and pay the £2,500 ransom the barmy army has imposed.

More than that, though: have you considered what will happen to the house when she dies? I know it is hardly the thing to discuss, but there is every possibility that her home has already been noticed by property developers/managers and letting agents. The house may be in a very favourable position and you may think it easy to sell when the time comes, but these people want to invest, and they might possibly just refuse to put in an otter for it, until the six months is passed which the Treasury gives you to pay the IHT, after which the Treasury adds on interest until the property is sold.

It may be prudent for her to release some of the value in the house so that she can live comfortably, and that will also swallow up some of the IHT. The interest on an equity loan accumulates over time, but that could be advantageous when it comes to probate.

If you are considering this, go to the Equity Supermarket. They have very good financial advisors with a choice of equity mortgages from all the providers, rather than apply to just one.

Agreed, Im not strongly against this, I think that even if it does come in, its years away so people can plan and sell up if they need to, for people like OPs mother, she will just be able to defer the payment or equity release if she wishes (I wouldnt do this personally), she doesnt need to worry and neither does OP< it will be ok.

However the relish and glee and ageism again, swap age for ethnicity, disability and people would never talk like this and if they did the posts would be removed.

Our house (outside London) is probably worth about £1.8 to £1.9 million given the renovations we’ve done, so there’s a risk we will be assessed as being liable to pay this tax. We have a huge mortgage (which far outstrips our equity).

Despite that, I don’t mind paying a bit extra based on our property value (although we are in a high council tax area so slightly resent that we already pay double what many people in more expensive houses pay in London). I would prefer this to an income tax rise.

However the cliff edge is really concerning, and may have a serious impact on our house value and prospects of selling in future. It’s obvious to me that the government should have brought this in at a lower rate (say £1m to £1.5m) and only charged an amount based on the excess over that value. I would be much happier knowing that we need to pay some additional tax rather than worrying about the fact that it may not even be worth us finishing our renovations because our property value will have a ceiling whatever we do.

Not asking for sympathy at all, but it’s another example to me of Labour putting its own political interests over fairness or common sense.

By that logic almost everything subject to an immoral tax - the outfits you wear, the car you drive, your can of Coke, that bottle of Chardonnay, your trip to the cinema, your holiday, your car park charge…everything except food and children’s clothes is taxed.

Like everything else there are winners and losers in a budget. There will be families who are pleased because it means there’ll now be more property available in the parts of London near the good schools and parks.

I think we are trained to be too sentimental about our homes and would be better adopting a more pragmatic approach. My own mother is rattling round alone in a 100 year old 4 bedroom house in catchment for some of the top secondary schools in the country. It’s a bugger to heat and requires work done on an almost weekly basis. If my sister didn’t live nearby to make appointments with tradesmen, make sure they’re paid, and tell them the problem, I’m really not sure that my mother would be able to cope - but it’s taking its toll on my sister too. We all know what my mum would be more comfortable, fret a lot less, and wouldn’t have to keep throwing money at problems if she moved into a luxury apartment (just one example, she has a fast growing 6” hedge that needs trimmed at least twice a year. When my dad was alive he’d cut it and it took him the best part of a day from beginning to end. Now she has to pay £200 a time to get someone in to do a worse job than my dad!).

I’m in my 50s now. I’m already planning to downsize once the kids leave and I retire. I love my home - but it’s designed for families, not a mature (and wildly attractive 😜) couple who want to spend a good chunk of their time traveling and living the good life.

The whole surcharge is less than £2m+ properties will have put on in a single month when the market was rising, which is quite a lot of my adult life.

Hard to feel bad about a fraction of that total uplift being wrapped into an eventual property sale or inheritance.

ALL OF US, whatever we earn, wherever we live will be clobbered, because all businesses will have to put the prices up to pay higher wages and NI (a percentage of earnings) and other costs.

The two child cap removed: how will that help families in the long run? Another excuse to put up prices in areas where there are lots of children, and we know where those areas are.

The only positive is the gambling tax, but that means the poorest who have a 'flutter' will pay more. They will not stop gambling if they are poor because of gambling.

I would rather pay increased tax so that all children can have free school dinners and dispense with the child benefit. At least the children will benefit from that directly. All children will stay to dinner which will cut the cost overall anyway.

Protests on a miniscule scale please, we don't want the thread to reach 40 places and not let everyone have their say.

In a world where the privatization of rail, water, probation seevices, childrens care.....has all been a disaster it's astonishing that anyone still thinks it's the answer.

And you would apply that to currently poor working-age people too?

Because if the state pension is abolished because you feel current pensioners ‘who didn’t bother to save’ should not be supported by the state in their old age, then you must feel that future pensioners should be treated the same - those future pensioners are currently working age people.

Just as well the two child benefit cap has been lifted, the parents can put the extra cash aside to see them through old age. Stuff the kids getting a decent meal, the parents have to plan ahead!

Astonishing how ready you are to boast about your inability to think beyond today.

Do you think people should have to do it because they lose their job/get divorced/become disabled/become elderly and can't manage the stairs any more? Renters are routinely turfed out of their homes if they can't afford the rent, or just cause the landlord says so.

And why would you lose your family or community if you downsize? Because you live in an area where it's 2 million or nothing?

If someone - anyone - can't pay the costs of living in and running their home - maintenance, tax, heating, whatever - they're supposed to move to somewhere they can afford. I'm not sure what you're expecting to hear; there isn't some "but I like it here" exemption. What do you reckon happens if she needs a new roof or something? Will you pay for it? Or do you think someone else should? Who?

If she ever decides she wants to sell, or needs to go into care or whatever, she presumably won't be turning down the £2m on the grounds that it wasn't worth so much when she bought it. Will you be refusing it, if you stand to inherit? You can't have it both ways - benefit from wealth (however it was acquired) but not pay the tax on it.