'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?

Sadly I agree with this. The money has to come from somewhere and there isn’t an option that keeps everyone happy.

We have to get people back to working full time and businesses back to hiring people. Otherwise we are only promoting the weak in society to the detriment of the industrious, and of course that can only end badly. Labour get into power once in a generation and then manage to remind everyone why they shouldn't vote for them. It'll be over in a year or two and hopefully we'll get something more sensible. I'm

Seriously BOOHOO

But they do have unearned wealth and in owning a £2m home they are wealthy enough to buy a £2m home were they to sell it.

I do get the point, but I don’t like this pretence that because they’ve lived there a long time it’s not a very considerable asset. If they sold it, would they be willing to accept what they paid for it plus inflation? Absolutely not, they’d want their £2m!

Honestly, previous Labour governments have done a hell of a lot more for working class people than the Tories. There's no doubt about that.

I suppose OPs mothers house could be something akin to this, probably not so fancy done up, but basically just a titchy terrace

Still expensive even 25 years ago, not sure about 50 years ago as per someone saying Notting Hill was a hell hole 50 years ago

https://www.rightmove.co.uk/properties/168103601#/?channel=RES_BUY

Glad at least one poster on here is beginning to see this is not quite as simple as it might first appear if you have no experience of the SE housing market – London in particular

Honestly, if I’d bought a house that had increased so massively in value so as to be worth 2 million, but I was on a “low” income, I’d use my financial sense and sell it, release the funds and invest them in a way to benefit me. There’s no point anyone owning a house they can’t afford to run. I wouldn’t want £2mil tied up in assets if I was struggling on a low income, that’s crazy.

so many of us having to make really hard decisions due to the state of the countries finances. You just have to do what’s best for your family and get on with it. I’m absolutely sick to my stomach at the thought of having to sell my lovely farm - my 9yr old loves so much, she wakes up to her ponies every day.

I just don’t think in this climate I can keep it going and will have to downsize so I can sleep at night. The worry is too much. I know it will be a move I’ll never get over but keeping us afloat and some sort of future for my DD is more important. People have it much worse. Times are definitely changing and I’m planning a lot more frugally as a result. Future less certain.

@WearyExLondoner

Why should people pay tax on their income (that they work for) but not on their property gains (that they don’t)?

Why should your ability to buy a house in London be determined by whether your parents bought a house in London and so can gift you a huge deposit, rather than by the salary you earn or how hard you work?

Where in London such small house will be 2m? Chelsea? It’s extremely rare case and you’ll have to figure it out

The absolute spiteful cuntiness on MN just beggars belief sometimes 🙄

One thing that the labour government are very good at doing is giving money to people who spend it rather than hoard it which then has a knock on effect with Small to medium businesses popping up.
They popped back down again when the conservatives come in Who take the money from the Small to medium size business and prop up their mates in corporate land By giving them an unfair Advantage over all of these small medium size businesses with the tax breaks they offer.

So many people in the 60's and more so the 70's had the foresight to buy well. Why don't people, especially the young, have that sort of foresight and dare I say fibre nowadays to jump on opportunities ?

The main difference, or used to be anyway, between Tories and Labour was that the Toris socialise public losses and privatise public gains

So public services, outsource them to the private sector, get loads of public, tax payer money going into private pockets.

When a private business does badly or needs top ups, the tax payer can also do this as well

This has been seen across the board, NHS tendering, public services being run as private business which of course you cant do with public need and statutory services (childrens residential and foster care being a case in point) HS2 as someone said, not seen any beneefit from this, public transport, the covid PPI fiasco

I’m in a similar situation, bought a big house for a fraction of £2m 25 years ago because, after I was first widowed I married a widower (used the insurance money) and we had to put two families together and I worked (still do) at home. But now they’ve all moved out and second husband too has died. But moving would
a) cost a fortune
b) I can walk from here to the station, the library, coffee shops, buses, churches, everywhere, so I want to live here, but there are no spare houses. I’d have to move away from everything I know and do.
I’d do a swap with the lovely young family next door to me but this house is probably too big for them. In the meantime, I have lodgers and they keep me company and their rent helps me run the house.

Yanbu and I am not right leaning at all.

Im not sure how they monitor this and how the value is determined. Surely its when you buy / sell eg) stamp duty

My db just bought a massive new build house mortgage free
. .. but its in the middle of nowhere in scotland and under 1m. I live in a 4 bed just short of 2m house in Sw london we bought for 700k ... its small compared to his.. he is by far wealthier than me but unaffected.

All for a wealth tax but needs to be applied differently l. And i dont mind paying to be clear if i had to

I’d be okay with the 1.9 m profit to be honest.

Sounds like it’s time for your mum to move and release equity

If I was to make an obvious comparison

If you have over £16K in savings then you cant get Universal Credit which most people seem to think is quite right

If however even by chance you end up with a £2 million house even if it was a sheer fluke AND you have a limited income why should you be exempt from paying tax on it

AND you may be allowed to roll over the tax so its not paid until death or sale

Please discuss

Because there aren’t any?

it's hardly ageism when the only reason we even know her mother's age was because OP was the one who brought it up in the first place to try and garner sympathy. Ultimately it's completely irrelevant how old her mother is or how long she's lived in the house - as is her race/ethnicity because she's be in the exact same position even if any of those elements changed.

There's no 'relishing' either because literally nothing is even going to happen to OP's mother - at most she'll accrue the unpaid tax until she dies or sells the house, and then OP (and, if she has any) her siblings, will have to pay it - after which they'll still inherit a fair whack of money they didn't earn.

No old ladies are going to be carted out of their homes and left on the streets to starve so nothing to be gleeful or sad about!

Ha ha ha

according to OP her mother is too infirm to move a few streets away so seems unlikely she'll be frolicking off to Dubai any time soon.

They had zero foresight. They bought cheap family homes because they were available and affordable. Not available these days. If you have an example of opportunities that people are foregoing, please clarify. I’d jump on one if it existed. It doesn’t.