'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?

Old widows do not have the broadest shoulders.

@mellongoose I think it’s far stranger that the triple lock has been left untouched.

It seems very unfair, and I'd agree that it is, but if she lives in London all this will do is make her council tax the same as it would be for someone up north living in a house worth half as much.

Capital Gains Tax is not payable on a main home - although it should be, but that's a different discussion.

That will come next year I expect.

The services provided to you at your home by the council don’t change on the size of your house

Ones with £2m do.

You are confusing WEALTH (the total value of a person's assets - ie, the amount of resources that they have) with GROWTH (the value of goods and services produced by a country - ie, our economic output).

Tax is not recycling money that is already in the system - it's redistributing money in a way that leads to more of that money being spent in the economy (as opposed to hoarded), which leads to growth.

The aim is not to create wealth (although the priority of many of the posters here is clearly to do so for themselves) - the aim is to create growth.

The economic illiteracy on this thread is upsetting.

Let's hope so, but I doubt any government will be brave enough, as pensioners are the most reliable voters.

The type of passive (huge) gains people have made by crazy levels of house price inflation is surely the very definition of unearned wealth? Seems perfectly valid to tax people who find themselves with a £2 million property having done nothing more than be at the right life stage to buy towards the left of this chart.

Isn’t that the point . Basically people around the country aren’t affected but people in London, who live in similar sized houses to other areas, now have to pay an extra tax just because of some unrealised value someone has put on their home. Why should people in London have to pay extra when they have done nothing different to a person in another area? The value only becomes realised at the point of sale but until that point it is simply someone’s home whether it is worth £10k or a £1 million.

You can argue about inheritance tax and unearned gains at that point but for 2 identical people, living in identical homes just in different parts of the country, having to pay extra tax seems very unfair to me.

A tax payable on your own home simply for owning it is state theft. Your home doesn't belong to the state (unless you are a socialist. But most people in this country aren't). You shouldnt have to pay rent (which is what this new tax is) to stay in your own legally owned home. It changes the whole nature of private property ownership in this country.

The comments on here saying someone has the broadest shoulders and should cough up are missing the point. If you take that attitude that someone should be effectively fined for owning a nice house then you suppress any ambition or wish to strive for better in life and instead everyone should just accept their lot and not bother. Its their own property. It doesn't belong to the government.

Im not affected by this tax living in the NE. But I think it's fundamentally wrong and immoral. As with so many decisions this government are taking.

The fact is, if this Govt and the ones before it put serious effort into getting corporations to pay the right amount of tax then as a nation we'd be far better off and we wouldn't be contemplating turfing widows out of the homes they've lived in for a half a century. Amazon paid £18.7m tax in the UK last year despite raking in £27bn in UK sales.

How many bedrooms does your Mother have OP?

she can rent one out. There’s a housing crisis out there! Little old ladies rattling around in big houses is not helping the economy

ok( it’s not nice that she has to move but that’s tough luck. She’s not living in poverty.

“Hoarded” is a interesting choice of words coming from an economist expert

I agree with you but taxation of capital gains in this country has always been on the basis of when the gain is realised, after the asset is sold.

Capital gains on a house should be taxed after the house is sold.

A wealth tax on ownership of a big property is a different thing altogether, and a first for this country in recent times, I think.

some people are delusional

go on right move/ look at what £2m buys you in central London

its a lot!

Her house is private property and belongs to her. Not you. And not the state. Its none of your business how many bedrooms she has.

It's a 3 bed. Although OP seems to think the small one doesn't count for some reason.

This👆 Labour government of envy. People paid tax to buy these houses. It’s an unfair policy. I don’t own a house worth over £2m

OP the "be kind" brigade aren't very kind are they? I think there is a lot of, completely unwarranted, jealousy on this thread.

Anyone with a heart can appreciate the situation your mum, and many others, will be in (and to be fair, all due to various governments meddling in house prices over the years)

I agree OP, there will also be very small run-down farm houses that sit in hundreds of acres which will be worth £2million+. I’m not sure if farms are exempt from this new surcharge. It definitely going to devastate lives somewhere.

But we all pay council tax which is the same?

What "situation" is OPs mum in? She just has to spend a little bit of her unearned, untaxed wealth, at some point. No kindness is necessary, because nobody is suffering.

@Snowonground do you count stamp duty as state theft? Lots of other countries have annual property taxes based on value or CGT on the main residence, state theft?