'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?

The OP says why those circumstances make it difficult, or sad. It doesn't say that it's impossible to move.

My own parents are being unrealistic about their ability to stay in their oversized, extremely rural house too.

You can understand it, empathise, but still think that these are people with options.

Me? I have it planned that I'll downsize at retirement into something suitable long-term.

Yet I am paying and won’t get one.

If the state reneges on its pension compact with voters, trust is destroyed and will not easily be regained. That’s bad for democracy

I do agree that the triple lock is excessive.

If you are paying, why do you say you won’t get a pension?

Indeed -
privatise key services ???
that’ll be better than tax rises …… !!!!!!

It’ll happen to my generation. Anyone under 40 knows they won’t get it so they need to take the plunge and just end it.

There will be a consultation in the spring on how to implement this.

Gov.uk says:

The government will ensure a support scheme is in place for those who may struggle to pay the charge. It is important this scheme is targeted at those who need it most. This will be a key area of consultation in the New Year.

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

I’m 26. It is very obvious that the pension is not sustainable.

This is exactly it

Possibly irrelevant but what part of London does she live in that she has such a close relationship with her neighbours?! I imagine that most people living in the £2m house parts of London aren't "lifers" and probably have little time for an elderly neighbour?

Call me a pragmatist but life moves on. All kinds of people leave houses with fond memories attached, for all kinds of reasons. It's sad but that's life.

Good for Granny living in a big house in the North! She'll still be able to continue to rattle around her mansion, just because it's not worth more than £2m to prospective purchasers. Meanwhile, Granny in the South, living in equivalent square footage or smaller, needs to sell up. It's a tax on the South of England.

...and pocket a massive windfall, no CGT if you sell the primary residence.

Will be great for the single mum and her children.

Maybe because they live there! A home is a home, not just its monetary value. They have roots, routines, friends, schools. Why should they move somewhere they know no one just because their home has rocketed up in value due to successive governments inexcusable lack of regulation of house prices since Thatcher's era?

Mansion tax should be for mansions. Not ordinary homes in London.

OP, could your mother consider renting out bedrooms to lodgers? There is a very good tax break on doing so, as you help ease the housing crisis. And it's no bad thing to have people living in your home if you are increasingly fragile. there are some schemes where young people who need cheap accommodation are placed with elderly people who need company. Maybe nursing students or PhD students on shoestring bursaries. Worth considering.

Won't someone please think of the people who own £2m plus houses through no fault of their own.

OP even in most parts of London a £2M house is a hefty sized house so i expect you mum is paying much more than she needs to for a lot of things - like council tax, energy, repairs, water etc...

I expect there will be an option for the very asset rich and very cash poor to put some sort of charge on the property, to be paid when it is sold or changes hands.

Yep.

I have moved house a few times due to divorce or work. These things in effect were forced on me, and I had to choose to downsize or move to new places. It all worked out in the end.
So while the people in OP's post are not going to find it easy, they have a £2m buffer that is wealthier than 97% of the rest of the UK, and they can actually downsize from where they are and live within their means.
This tax will also slow down the inexorable rise in house prices that is sold to us a 'feeling rich', when in fact it enslaves us to a lifetime paying a bank off (and for families, forcing two to work full time)....

Luck of the draw. Granny in the south can sell up and head up to a new mansion worth £1,999,999 if she wants

We need first to find out a start date and how exactly it'll be administered.

As above equity release is one possibility or the Council taking a charge on the property is another.

Is Mother on Pension Credit?

This mansion tax could have been so much worse… Labour was always going to have a mansion tax in some shape or form, they have been going on about it for years and years and years. We should all be happy it is set at 2 million and if there is a general election and a change of government, it might not even last.

Where standard of living and facilities and amenities are better in the South so cough up!

Its their home. What do you expect them to do, chip a few bricks off eveey time they need to pay for something?

Yes I certainly am basing saving for a pension on the assumption that there will not be a universal state pension by the time I get there.

It can be detrimental to elderly to have to move out of their area. Most areas don't have adequate mount of suitable housing so people have to move further away, lose connection and deteriorate faster than if they stayed where they were.

Americans have been saying this for decades about Social Security. Yet it hasn’t collapsed.

I think lawmakers will always prioritise pensions. Not only because pensioners vote disproportionately, but because this is an acid test of trust in government. If government reneges on its commitment to pensioners, anything could happen. Everyone knows this. No one wants to test it

Why should you be uprooted if you're in the situation of OP's mum?! Completely crazy. You live somewhere for 50 years, have your community there, all that stuff is important for an elderly person.

It’s their home
but no one deserves to sit on 2 million ….
no none