'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?

Really? I live in Cheshire and house prices in some parts will most definitely fall into this bracket! So it’s not just a Southern’ third world problem! 🙄

The debt will reduce the size of the estate but also inheritance tax, so effectively deferring means you will only pay 60% of the mansion tax.

In fact, the saving is likely to be substantially more because you start losing the residential nil rate band from £2m and the debt may just give some of it back.

CGT is not payable on your main residence though, so in this scenario it’s not an issue.

no. We are skint as a country because the gov has squandered the money and mismanaged it.
The rich pay already pay too much tax, and they are already leaving the country.
the rich pay more tax more than I’ll ever earn.

If they want to create wealth in this country, then they need to attract, help and encourage businesses into and within the Uk.

You don’t create wealth by taxing people. This is just recycling money that’s already in the system. Stop parrot repeating labour’s one tricky pony argument.

People keep quoting this nonsense but the biggest expense is pensions and healthcare for an aging population. Not people having too many kids!

There’s a large house in our village, think Lord of the Manor style, and it’s falling down. The owner (never married, loner) won’t sell as it’s his ‘ancestral home’ but he’s so short of money that he shoplifts in the village. It’s a sad situation really.

@VaccineSticker how did the previous government encourage wealth & growth? wage stagnation & lack of investment hasn’t made us or the country richer.

People keep quoting this nonsense but the biggest expense is pensions and healthcare for an aging population. Not people having too many kids!

Why is there such a reluctance to acknowledge this?

How does she pay for the upkeep of an aging £2m home if she has zero spare cash? It surely costs and so she must have some money?

So many wrong assumptions here - a lifetime of home investment - no, she had a house to live in through her entire life, where she was happy and comfortable. Its increase in value had nothing to do with her “investment” but simply a product of government mismanagement. Even if its value dropped by 50% she’d be passing on huge wealth to her children.

It’s been said so many times that the tax can be deferred until her death or the house is sold, so it won’t affect OP’s mother at all. OP’s huge windfall will be reduced by a tiny amount.

As for the impact on the poorest in society, they would absolutely benefit from cheaper house prices.

Perhaps because it's completely irrelevant to the question the thread opened with?

get a lodger . Even in London, £2m is not a small
house

@MontyDonsBlueScarf how is it irrelevant when we are discussing the budget & tax risss?

I don’t believe this thread is true

@MontyDonsBlueScarf did you also miss where posters are arguing that the OPs mum will be funding the “feckless” to have more dc? How is that more relevant then the ageing population?

If someone poor owns a £2m house, they can sell
up and go somewhere cheaper/

London is hugely diverse. You get £2m houses and cheaper houses in the same catchment areas. So no need up root, change schools

Your friend gas owned her house for 15 years. It’s worth over £2m

so she bought it in 2015. What did she pay? £1.5mil?

I’d much rather they’d started on the massive public sector pension pot rather than pick people like your lovely mum, OP. So short sited.

Yep, people are just making stuff up, next will be "i can't afford to use my Tesla and will starve because of new EV mileage tax"

When you get to that age, you can’t just go and get a better paid job or promotion. Like I will have to, she’ll have to pay it from her pension. Sorry about being old.

The LGPS is self funding and actually makes money for the Govt.

A Band 5 healthcare worker earns £7000 less than the UKs average wage, even with 4 years experience, still £4000 below - but you want to cut the only so called benefit they get?

That's not sad. It's pig headed and irresponsible.

@mellongoose so what would you do to public sector pensions? The really good schemes have been closed to new entrants for years, it’s today’s pensioners that have got those.

I’m not sure but given how socialism is about redistribution, it seems strange that these remain untouched by the Chancellor.

I'm having my doubts as well.

When I checked Rightmove for my own town (which is an expensive one) I couldn't even find any listings for houses over £2 million.

I just don't believe there are all these modest little houses that originally cost peanuts.

And the anguish displayed for people who might have to downsize to a million pound house is in sickening contrast to the indifference shown towards younger people who cant afford a homr in the first place.