'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?

My parents house would fall into this category, they will be fine…

It may be the biggest expense but people can't help growing old and are entitled to a reasonable standard of living and medical care. Whereas the amount of kids people have is a matter of choice within their control, unlike aging.

Erm - yes. Hoarded wealth is a commonly used economic term - it refers to wealth kept in unproductive assets or savings - so it doesn't get into circulation to stimulate the economy.

I'm not an economics expert - far from it. That's the point I'm making - it worries me that even my rudimentary grasp of these concepts outstrips many of the commenters on this thread - who are very very confused.

This ^.

The Government has overnight changed private home ownership in the UK. Regardless of whether you think bigger homes should be taxed, it's outrageous that they're staking another claim on homeowners when they should be going after corporations to pay the correct amount of tax.

Exactly!

No it isn't. Council tax is a fee for services used in your local authority where you live and is paid to the council. Thats reasonable.

The mansion tax is effectively the government charging you rent to live in your own house and goes to the central government coffers.

And it has impacted productivity, disproportionately affecting the young. Economies don’t tend to grow when assets earn you more than wages.

A fair amount of social housing in London is worth more than £2m. This is mainly a London tax. It should have been regionally adjusted.

Equity release.

Just saying it again for the people stubbornly refusing to hear it.

@Cantthinkofafunnyusername14 how do you go after global corporations?

Your poor mum with her 2 million pound house she own withoutortgage, I can't imagine what she could ever do. Gosh doesn't she just wish she'd lived on disability benefits her whole adult life like my mum did, dying at 56 with the threat of losing her council house due to the bedroom tax hanging over her head. Your poor poor mum

I will bite. How do you know that the council will value the property (DM’s) over £2m threshold?

Also how much of an increase from what she is paying now will the new taxation be? My understanding is that your DM will be paying high costs already, she must have a decent income. is that private pension income? Are there any tax allowances that your DM hasn’t taken into account. What assets does she have?

Yes. This.

Almost nobody on this thread seems to understand it.

@Bumblebee72

od course social housing is not worth £2m

two million? Are you insane?

Stamp duty I think is not a good thing as it stifles the property market. But at least its based on a single transaction. Its not a yearly rent to stay in your own house.

It's just home owners. It will be anyone who lives in a property worth over £2m. Council Tax is paid by the residents.

You mean like the farmers are having to do? Sell part of their land to pay the inheritance tax. Thus reducing their ability to make a living on what land remains.
Until there is no land left to hive off.

But someone has to pay for that healthcare, ageing costs and an ageing population costs more. The majority haven’t paid enough.

Plus the vast majority aren’t having loads of dc, certainly not like previous generations

Here’s what £2m buys in central London.

https://www.rightmove.co.uk/properties/169264469

6 bedrooms and 2000 square foot

She may not be able to afford it now but she has an asset worth £2mil. It can be paid when sold.

As much as it’s not her fault it’s increased massively in value on the flip side why should someone become a millionaire because they just happen to have a huge increase in value whereas around the rest of the country people have not had such luck?

The budget isn’t going to make me richer but I actually thought it was better to an I expected it to be.

Maybe because for once it wasn’t a budget that’s also going to make me worse off?!

@ProcrastinatorsAnonymous so frustrating! And then people complain about lack of growth!!!

Here’s another

https://www.rightmove.co.uk/properties/152337731

1300 sq foot

Its not council tax though.

Me thinks a lot of people are afraid their inheritance is going to be eroded.

It won’t affect social housing.

it won’t affect renters

Its basically a change to the council tax bands. Further reading here

www.gov.uk/government/publications/high-value-council-tax-surcharge/high-value-council-tax-surcharge