'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?

What about Ireland? No visa, free movement, same lingo, good economy, good education system.

No council tax or water rates, but there is an annua charge for bin collection about 250 unlimited lifts depending on the tariff chosen. General taxation including motor tax covers everything else. there is a property tax but it's not that high relatively speaking. a £400k house would be charged about 300 quid A YEAR. Obviously it rises with the property value and is charged to owners only, not renters.

Those in mansions (or in any property) in Ireland who need full time care will never lose all their assets (Including investments and cash) in fees. The maximum anyone will pay is 22.5% on their assets and 80% of income (annually). Obviously the more assets and income you have the more you'll pay but it's capped at 22.5% of all assets. That's seems very fair to me.

Income tax is charged at 20% up to 44k, and 40% on the balance. Some concessions for single, widowed, etc. PRSI (NI) is also charged on income while working.

Child Benefit is universal and is not means tested, no cap on the number of children.

It's not perfect, but the tax is progressive, and the overall burden appears to be fair enough.

Those are the basics. I know all this because I live there and couldn't be happier!

I think you missed my sarcasm 😊

Soon it will be semi tax, then one bedroom flat tax, then studio tax !! It's the Liebour way !!

If you don't consider moving an option, your choices are basically equity release or you and your sibling share the cost (knowing you'll make it up when you inherit one day).

If that's not acceptable then downsizing, moving her in with one of you or a home in the near future seem the only other options.

wow. Did you read the post?

Labour haven’t forgotten. That’s probably why they’re pushing so hard for assisted suicide.

How does that logic work?

I impose an extra charge on you and you cant afford it and now the conclusion is that you couldnt afford to live where you live BECAUSE I have introduced something that you now cant afford?

No one says she cant finance emergencies or pay for insurance, this is an additional outgoing, so just like when another expense comes into your life it doesnt mean you couldnt afford your life before that

Lots of people have worked hard without being able to afford £2 million houses.

Reeves is a fucking idiot. Today made that plain. Raising minimum wage but freezing the tax thresholds? She’s just dragging more lower earners into paying more bloody tax.
The “mansion tax” element doesn’t affect me but I can absolutely see that it will
penalise the SE where people are stretched to the bloody limit anyway. A very ordinary 2 bed terrace can be in excess of £500k so a £2m house isn’t necessarily a mansion plus it takes no account of how people have ended up in said property. Inheritance? Working their arses off doing 80 hour weeks in some hellish job for a decade? Sheer luck buying in a shit area in the early 80s? Wages might (and I stress, might) be a tad higher but they’re not astronomical for most people and an extra £2500 a year is a lot.
Starmer’s Kentish Town House and Reeves own London house are conveniently under the threshold. Funny that.

There have been NO WINNERS since this barmy army got in by pretence. None of them have had business experience.

As for Ms Reeves, brought up in a one parent poor family: was she fed on a diet of watching 'Upstairs Downstairs' and Downton Abbey'' and thinks people live like that now? Has she built up such resentment against those she considers wealthy that she really thinks there are more wealthy people than there are?

When the Revolutionaries in Russia killed the Czar and his family, they really thought there were enough princes, counts, big wealthy estates, etc., to share with everyone and give people a higher way of life.

What happened was that they found there wasn't enough wealth to share out anyway. Grand palaces were taken over, and the rich made poor and the poor made poorer meant they had nothing much more than a room per family. Having taken the wealth away from the titled and high earners, there were no jobs. There was no heating for warmth and cooking, and when the people started chopping down the trees, they were shot!

There was nothing for anyone, no incentive, no development - nothing, but the population became more manageable. Pretend to give when really it was still taking and rule the people.

Real good communism. Just what the labour doctor ordered: social justice.

It was probably £20-30 k when they bought it.

I'm reminded of the Dan Neidle quote (paraphrased): "There's one word for people who are asset rich and cash poor, and that word is : rich."

If the payment can be delayed it is effectively just additional inheritance/capital gains tax.
Sounds ok.

True, it’s a terrible idea (for those who have other options) but if the OP’s mum doesn’t want to move, doesn’t want to take a lodger and no one else can pay for her then it might be her best option, despite being expensive. Ultimately it’s the OP who will suffer as her inheritance will be less.

Are people being deliberately obtuse?

These houses were not worth ANYTHING LIKE £2n at time of purchase

You could say this for any sad / disastrous/ difficult thing that happens. Not being able to afford to stay in a house happens all the time for seemingly unfair reasons. Luckily, the OPs mum is sitting on £2m. £2m! I'm sure she can find a nice warm home for that.

As a country we are totally screwed. This budget has only benefited anyone without assets or on universal credit. The gap between low earners and the better off grows ever wider. We are definitely not all in it together. My DH and I have lived in the same house for almost 40 years which we now own mortgage free. . DH is now retired and only on the state pension and I only earn a modest Salary of £27K.he did have a very poor company pension but has deffered drawing it as it lost over £20k after the Liz Truss debacle in the hope that it will recover some of it’s value.I have a small private pension on which I pay 20% tax from when I worked in a bank before we had children. My husband spent over 40 years working for a small private company, 10 years with no pay rises and he retired last year on not much more than minimum wage. What a muppet I hear you say, me too before you ask but despite being a qualified electrical engineer never felt he had the confidence to look for a better paid job as it was important to him to support his family. Our DD is in her final year at University, we have supported her for the past 4 years without her having to work. We don’t have an extravagant lifestyle, a couple of meals out a month and a couple of bottles of wine each week. What this government doesn’t seem to appreciate is that it is only the private sector that generates wealth, NHS and all public services are all funded by taxpayers. They just don’t seem to understand this and I totally despair what the future looks like for our children and Grandchildren.

"Didn't bother to save", whilst we all appreciate it isn't a piggy bank and pensions are always paid for by current working age tax payers, these people paid into a system with the expectation they would receive a state pension one day. I'm sorry people have admonished you for not owning your own home but you just sound bitter

Notting Hill was a run-down hell hole in the 1970s. Houses were cheap and no one wanted to live there if they could afford somewhere else. Now those homes go for millions.

Poorer people don’t move house frequently - it’s too expensive with moving costs, solicitors fees, stamp duty etc. So they buy a house they can afford and work hard to make it into the house they wish they could afford. And they stay put. For years and years. Through working, bringing up a family, and finally in retirement.

Then some squeaky-haired half-wit comes along and states that because the homeowner hasn’t moved for 50 years, the insane increase in the value of their house over time is unearned wealth for which they should be eternally grateful. And taxed on it too. Taxed on the assumption that they are magically wealthy enough to afford to buy the house at its current price, even though they bought it when the area was little better than a drug and crime ridden slum.

Maybe if Hull suddenly became fashionable and desirable the residents would be happy to pay a surcharge on their unearned locality benefit? And if they don’t like it or can’t afford it, then they can simply move and downsize.

From the description of the house it seems bizarre that the house could be worth over £2 million

Are you really sure?

If you are then it shows how dysfunctional the UK Housing Market is

.

I guess you manage in the same way that people who can't afford their food costs or electric bills manage. Except you have the advantage of a 2 million pound asset to actually help you unlike most people.

I live in another area like that. I was speaking to a lady who moved in the early 80s and the area was full of crappy bedsits. No one could understand why she moved here. it was dire - people thought she had lost her mind .

now it has been gentrified and she’s still in the same house. The house of worth a fortune but it means nothing to her. It looks relatively similar from 40 years ago. She has a newer kitchen and bathroom and that’s about it.

As a pp has already stated, the charges can be rolled up and settled either from her estate after she’s gone, or when the house is sold, if that happens first.

Its not immoral. OPs mother has at least options. She can sell, she can get equity release, or she can get a lodger in.

The poster also could help her out, and view it as an investment. GIven than they will be likely to inherit a lot of money.