To think that the new tax on £2m will eventually be harmful to ordinary folk?

[IwishIcouldski]

I'm concerned that the new tax on properties over £2 million will push more buyers toward homes below that threshold. Increased demand at lower price points could intensify competition at £1.5 million, £1 million, £500,000, £300,000, and so on, as buyers adjust their expectations downward in response to pressure higher up the market but still below the £2 million mark.

It also raises the question of who will actually buy the £2 million-plus homes. I can imagine many sellers pricing their properties just under £2 million to attract buyers, which could drive prices down at each prove level across the market. Meanwhile, some of the remaining £2 million homes may end up being purchased by the very wealthy or by landlords who convert them into multiple flats. There may need to be big drops in prices because when you buy, you would not want to be dragged into the £2m mark after a couple of years because of inflation.

I feel it will eventually harm ordinary people over time but the wealthy will be able to weather the storm.

I wondered how long before the VAT on Private School fees would come into it. My heart bleeds.

You can say what you like but for many years now the rich have done very well fur themselves while the Tories took money from welfare but also wasted money & f**ked a lot of things up - hence the mess we are in.
Now things are changing and wealthy people don't like it.
Let's see how many people actually leave shall we?

In fact it's actually young people who are leaving partly because of the ridiculously high university fees and the impossibility of getting on the property ladder, particularly in the South East.

Why should it cost £500 to revalue a house, on average? If a property has changed hands recently, it can be done, approximately, in the blink of an eye by using a recent sales figure. These valuations will necessarily be rather formulaic.

For legal reasons I recently I had to organise in depth valuation of a property done in one of the world’s more expensive cities. Even with the profit motive in play, a long site visit and generating a report to stand up in court, it barely cost £500.

In many American municipalities properties are revalued annually. It really isn’t a big deal.

I'm not sure that fiscal drag will be such an issue. The tax may act to deter house price inflation at the top end.

Perhaps instead of council tax being in bands, it should just be a flat percentage of home value. Then it follows prices. My Council Tax is around 1% of my home's value, for illustration.

The Laffer curve starts at zero (0% tax, therefore no revenue) and ends at zero (100% tax so no one pays), with the peak revenue being sonewhere in the middle.

Wealth is mostly taxed at 0% at the moment so there's some scope for increases.

Well then that’s a perfect illustration of why the insurance value wouldn’t work. My house is expensive because of where it is rather than the cost of the raw materials so the rebuild value is much lower than the market value.

I would say it. This country is done. They have used Rachel Reeves to deliver this. It is all the ideas of new Labour start Torsten Bell. Labour will do enough irreversible damage to the economy until the next elections.

You can stay here to enjoy the shitshow. Keep us posted.

I don’t think the elderly should have to give up their homes just because younger people want them. It’s better for them to invest in making their homes more accessible, senior-friendly, and future-proof. I’m against taking away what makes people feel comfortable; I’m all for making what’s already comfortable even better.

There are hundreds of large houses being built, and if young people can’t afford those, they won’t be able to pay for an older home that needs costly renovations either. It just feels like a desire to see older people go through unnecessary hardships for no real reason.

The Labour government has promised homes for young people, so now is the ideal moment to push for them.

After reading the whole thread, it’s pretty disheartening to see how negative the culture in this country can get when people are in a bad mood. It often feels driven by envy and a race to the bottom. Culturally, it seems we learn that if someone has something we can’t have, they shouldn’t have it either, or we expect them to help us get it. This mindset lingers, as if we’re taught to dislike or even resent those who are financially successful, with little appreciation for people who do well.

Check out what a Nigerian has to say about our country:

It's not about envy though, it's about people who have a lot complaining because they are being asked to pay a bit more to help those who have less.

But apparently if anyone dares to say that maybe someone who resides in a house worth £2m can and should pay a slightly higher tax on that property & can afford to do so it's seen as jealousy & envy.

I'm not aware of a shortage of family homes. It's all the developers seem to build.

I am 62 and have a Victorian 4 bed house. My ds will head off to university next summer.

I've started looking for decent retirement properties and there are very few. I refuse to be shoved into a claustrophobic 'retirement apartment' with ludicrous fees, no outside space and zero resale value.

Plus I've just spent 14 years renovating my current house. Am I not allowed to enjoy it for a while? No one else wanted it when it was in a mess. It was on the market for 2 years. I'm the one who has put in all the work.

Perhaps if more decent retirement properties were available, elder people might be quicker to move.

And perhaps ds will want to come home for a few years while he saves a deposit.

Exactly. Our house is also in an expensive area and a large plot. I KNOW how much it would cost to rebuild, because it’s my job! But survey is done by RICs accredited surveyor and that’s that. If that’s how they value houses for this new tax, lots more people may well be included…..

Why 'encourage' with a tax?

Why not do the opposite and offer cash incentives to people who want to downsize?

Why choose the stick when they can choose the carrot?

But yesterday you said giving money away doesn’t fix things. All governments are pensioner centric as it is, I can just imagine the (justifiable) outcry if taxpayers’ money was thrown at old people living in houses that they’ve already made an eye watering, untaxed profit from.

Taxing assets isn't a tax on working people. It's a tax on people who have high value assets, such as houses worth £2 million. Nobody said those people had to be working.

That's a completely different situation.

I'm surprised someone as clever as you can't see the difference. Maybe because it's difficult to deviate from one line of thinking?

If you move away from the the attitude that people should be giving you their money then you can see things more clearly.

You can't fix child poverty with free money giveaways, you need jobs to do that. Taxing everything that moves win't bring jobs.

The mansion tax is a tax on working people, people who work hard to pay their mortgage and the pay their tax, or people who have done that all their lives. It's not designed to make money, it's designed to be punitive.

Or people who have inherited huge houses and done nothing all their lives. Saying it's a tax on working people is disingenuous. And even if those people do work, "Working all your life" doesn't preclude you from paying tax. Otherwise where's my tax breaks? I've worked since i was 16. I don't see anyone arguing for my right not to pay tax.

That's a completely different situation.

You’re absolutely right, it is different. In one instance money is being given to people with nothing to alleviate child poverty and improve their health and education outcomes. In the other it would be giving it to people who have made a huge unearned, untaxed profit from owning an asset that cost them a fraction of its current value in order to benefit other wealthy people. It would be political and economic insanity.

But people have other means to alleviate child poverty.

It's called a job. It's called responsibility. And these jobs cannot be provided with tax raises.

So you want to take even more from someone who has paid their way? Charge them what is basically leasehold to live in their own house? I'm not surprised, TBH.

Creating a £2M ceiling on the housing market is repeating the same mistake as when Stamp Duty was hiked to the point where people didn’t move up the ladder.

People stayed put , built loft extensions etc
house market stagnated . First time buyers couldn’t get on the ladder. Fewer houses for sale = demand and supply = prices raise = even more difficult for FTB.

i agree with OP - any tinkering with housing market affects everybody, and probably not in a good way.
( and … was this done because Tory MPs will be most affected and Labour backbenchers not at all ?)🤔

So you want to take even more from someone who has paid their way?

And you want to give money collected from people on minimum wage to old people who own a seven figure (most of which is unearned, untaxed profit) asset which they can liquidate at any time. Make it make sense.

Of course jobs can be created with government investment. Raising taxes will go some way toward that investment.

My area was on its arse before New Labour came in and provided jobs. Now there are decent employment opportunities in the Passport Office, DWP, HMRC, CSA, DVLA and the Land Registry.

These jobs didn’t exist before a government chose to create them. You can’t expect people to get jobs in places where there are no jobs. Those jobs need investment.

People on here think that the entire UK is like London. I was told on here that there are plenty of unskilled, full-time (9 to 5) vacancies for single mothers. Not where I live, there aren’t.

But it's set at £2m. What percentage of the population do you seriously think are buying houses that cost that?

If someone can afford to be buying a £2m house in the current climate I should imagine the extra £2500 a year for this extra tax won't stop them or be unaffordable.

People who dislike the Labour Party are desperate for this to be a terrible tax that will have horrifying consequences when the reality is probably that it won make a huge difference at all because it affects such a small percentage of the population.

It will raise some revenue of course which is needed but, again, not enough to really change things.

It's not just the government that creates jobs.

It's small companies as well. And this is where the current tax and NI raises make it difficult. Make it easier for a mother with children to be employed in a small company near her, will help her lift her children out of poverty.

Well, yes, if the government want an asset that is mine they should pay me.

Otherwise it's Hello, Comrade Lenin!