'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?

Once taxes are in they rarely get removed again. It's free money for the new government of whatever colour, something they won't get stick for.

I logged on to MN to see if there was an ‘oh no I can’t afford increased tax on my mansion’ thread yet and wasn’t disappointed.

We need more investment in infrastructure, schools, NHS etc and the money needs to come from somewhere. I have no sympathy for people in huge homes complaining about higher tax, especially when they were bought at a fraction of the price.

hopefully they will allow this to be offset until the current occupier leaves either due to death or sale.

I think overall it’s not a bad tax though. I have plenty to say about the rest of the budget.

No it’s effectively a surcharge to your existing council tax

Yeah agree with others, it’s tough but it has always been the case that if you can’t afford the bills on your home, you have to move, whether you want to or not. Obviously there are some cases like this where that isn’t ideal but with 2 million of equity, she can move somewhere pretty nice

I think people might be less angry about it if the Budget was fair to everyone. But it isn't. Benefits are going up, paid to those that dont work by those that do work, often for low pay.

Sell her house and buy a cheaper one. Plenty of people have to do just that even in older age.

Maybe they could just downgrade to a 1 million pound mansion? Poor darlings.

Yes, a lot of the time (not always of course) the opposition will rant on about how bad of an idea something is, but when they get in, it mysteriously becomes not a priority to reverse.

conquer and divide again.

Lets pitch people against each other over an imaginary amount of money.

Don't you see this is what they do with everything... get rid of these governments is the best way forward.

The largest benefit is the pension.

Labour won't be in government either.

@Slinketypokey is right, we're skint and the previous government asset-stripped the country for all it was worth.

If we want school and hospitals and infrastructure, we have to pay more tax.

The country is skint because of the mismanagement around the money they collect from us. If they done the right thing and didn't give away or waste £billions then we wouldn't be in this situation.

The reality is that the government can print money when they want to... we aren't skint. The money system is an illusion created to keep normal people poor.

Not sure if this has been said, but there will be an option to defer and pay when you sell. It will be a tiny dent in a £2m house compared to IHT.

Your mum will have 3 years to sell it.

Quite. It’s a populist policy. It looks good to say “oh look, we are tax the wealthy, that’ll show ‘em”. In reality it raises very little (if anything). It’s projected to raise £400m per year. It’s a tiny amount in the overall scheme of things. It has nothing to do with raising money and everything to do with trying to win votes.

Labour will be in till 2029 actually.

Yes I was going to suggest the same. I don't normally think equity release is a good thing to fund holidays and things but if it keeps someone in their home when they wouldn't otherwise be able to stay there I think it's probably a sensible option especially when a property is worth 2 million and there's likely to still be huge amounts of equity when the tile comes to sell.

I don’t have a lot of sympathy for the older generation “who don’t want to move” to be honest.

I didn’t want to be forced into moving 3 times in 4 years while private renting either (thankfully I’m not in private rentals at the moment). I didn’t want to be given various shit choices of different colours of mould on the walls and different lies from the landlord about what caused it, naturally the tenants not the building and upkeep. I didn’t want to be in a position where working, even having worked up to median wage at one point, did not pay the cost of owning a house of my own and forced me to pay the cost of 3 for an idle rich landlord. I never wanted to be working full time with kids to be honest, much less full time + extra to be able to afford a holiday and extras at Xmas, frantically overpaying a mortgage i should have been able to afford years earlier. Nor move out of my region where I was living and working to a new one myself because it was the only way to get a mortgage at all, losing my career in the process.

Why have the neverending wants and entitlements of that generation always always always been prioritised over the needs of those below? Why have their wants grown as our needs have been ignored?

Thus is suggested every single day.

Why should they have to do that in order to stay in the family home?

That house has been bought and paid of with money already taxed.

This.

I can't afford to live where I grew up - house prices are too high - that's life.

My own DMum may have to downsize at some point due to logistics and living costs - she doesn't have a two million pound asset to back her up and give her more choices - not even a one million pound house or even close.

There's also time to plan before it comes in - so pleanty of time to make decisions.

Triple lock should have gone. Our kids are being shafted by ever greater debt being piled on. It's extraordinary.

“If we want school and hospitals and infrastructure, we have to pay more tax.”

Tinkering around the edges with policies like this never raises enough though. We need a lot more people paying a bit more tax. 1p on basic rate income tax or VAT would have raised billions. Targeting a tiny percentage of the population doesn’t raise enough.