'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?

why? Likewise If you can afford payments on a £200k mortgage surely you can afford an extra £200 a month?

What about homes that are full with people who can no longer afford to live in them as their income has dried up through no fault of their own. People with lots of children who invested all their money in their home and have a low income.

Forcing frail elderly people to move often hastens their death. It's not a simple decision to make.

This is very much a tax on London. The irony is that my current home probably meets most people’s vision of a mansion, but because we moved to the sticks we are safely below the threshold. Had we stayed in London and, using the same budget, upgraded to a larger terrace or semi-detached in our neighbourhood we would be subject to the new tax.

There’s also the question of who will buy these properties. I suspect we will see a bump in people at that price range looking to sell while the number of people looking at that price range will drop not only because of this specific tax but because there is a general exodus of people with that kind of capital due to other Labour economic policies. Curious to see how nimble the government is at adapting to down valuations.

This is a budget that has removed all reason to work hard, save hard, take risk and invest in your community by creating jobs.

It is a begrudgers budget. How dare you have a large house in London/rental flat you saved for/dividends in that company you grafted to create.. No-one likes a striver in Labour’s UK. The end.

Because she is living beyond her means, she has the ability to pay the taxes that will be due.
Or, when I get my tax bill can I decide that I shouldn't have to pay it because I need a new car/kitchen, why should I put up with this shabby old car/kitchen, etc

Govt statistics. One third of the population does not have a private or occupational pension & is reliant on the state pension as sole income. Let that sink in. We are talking millions and millions of people homeless if they scrapped the state pension.

The UK has been being groomed for a long, long time into spiteful hatred for anyone perceived as having more or having done well. They have been sold the lie that anyone wealthy is just lucky and not hard working.

Now the government has all but destroyed the ability to buy a home for younger people, has given the young no hope and has massively increased taxes to a huge burden while paying out benefits nobody can afford, the people are turning on one another. That was always the plan.

There is no reason of any kind a person who has bought a home years ago should not be able to live in their home without being harassed, stressed or lectured about it - but the politics of envy decree otherwise.

In the UK, you must be absolutely blindingly wealthy or utterly destitute to live without fear and constant struggle. It's not a glitch, it's by design.

Exactly this! My parents moved 2 years ago. They didn’t want to move but knew it was the best thing to downsize by choice before they were forced to by increasing bills etc. People want to have their cake and eat it. Entitlement. The council tax bands are no longer fit for purpose. Those of us in average houses pay a much higher proportion of that value in council tax than those with multi million pound properties. Also people saying they are targeting London and the south don’t seem to understand that wages are lower, councils are given less money and council tax prices are relatively much higher than they are down south.

This is true, and sad. But they can free up capital by downsizing. People do this the world over.

Not disimilar here - a wreck bought at 615k, spent 20 years doing it up whilst raising 2 SEN kids. Just finished it this year and it’s worth £1.9 per our mortgage survey this week - which is why I am peeved, too. Also had years without holidays etc.

But the govt don’t care. Those assumptions are not mine, but ARE precisely the type of fallacies that the labour government and the civil servants are basing their calculations on. If you can afford a mortgage of £1,2 m on a 2m house, you can afford the extra; if you have spent 20 years living in your property and have paid the bulk of your mortgage off, their assumption is - again - that you can afford the £200 pcm extra. And, on paper, they are probably right in most cases.

Theres no contractual entitlement to a state pension. Thats simply a fact. Its a popoular misconception that payments of your own NI will guarantee a specific state pension and theres a big fund to pay it. Payment of today's pension relies on today's workers paying tax. And the state can reduce or increase state pensions as they see fit. I fully expect having paid NI for my entire working life that I will get no or a very reduced state pension along with the rest of us.

There is a contractual entitlement to public sector pensions as they relate to employment. So they are much harder to renegotiate.

Sorry. I dont make the rules. We are talking about the UK btw.

Because she can't afford it, she is sitting in an asset which will have increased in value by at least £1.5 million. Of course, this is tough - harsh even - but it is the reality. She could afford to move, but doesn't like the choice (for understandable reasons).

Essentially the reason for objecting is to do with insisting that you be allowed to live in the manner to which you have become accustomed. Despite not being able to afford the bills which come with the lifestyle.

She is elderly and hardly living beyond her means. She is frail. Have some empathy. When she passes on, there will be plenty of tax paid to the government.

Really? You can’t possibly think why? £200 would amount to, say, 3% of their mortgage payment - does that sound affordable to you?

Not wanting to move is a choice, however old you are. Define elderly.

You would have to be incredibly well off to buy a house for 600k in 2005.

I would like to know how they can determine that a house is worth 2 million. Property is only worth what someone is prepared to pay for it - how can the gov. be valuing properties? Many houses are valued at one price when up for sale and then fail to sell at that price and have to be reduced before securing a sale. The value of houses is also not a fixed thing.

Then people who have children who can’t afford it are living beyond their means. How would you punish them? Same principle.

She could afford it before the novel tax. And now she can't and may have to leave her home. In order that benefits be increased to non working people.

I dont think this is going to work well politically.

How does that make sense? If you have an 80% LTV mortgage on a £2 million house your monthly repayment could be around £8800. You'd need to find 2.2% of that to cover an extra £200 tax.

On a 200k property the equivalent mortgage would be £880 per month. Meaning £200pcm would be 22% of your mortgage payment. Hardly the same situation after all!

They have been sold the lie that anyone wealthy is just lucky and not hard working
@judgementday2 the wealthy who have worked hard are lucky that their efforts were richly rewarded. Many people work hard in stressful, dangerous & unpleasant jobs for low wages.
Many wealthy people get their income from the appreciation of assets, and so dont need to work.

It is all relative- people who buy expensive properties are more likely to have stretched themselves to buy it than someone who takes on a £200k mortgage. I certainly didn’t have an extra £200 a month spare when I look on a huge mortgage. I already was doing 3 jobs.

There was a recent article in the Observer about pensioners who've never been able to afford a home who are now having to rent rooms in the private sector.

A situation that will become increasingly common.

Any tears for those people?