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.

Is this tax hurting "ordinary folk"?
How many "ordinary folk" do you know living in £2m houses?

Stop the constant over stating of the impact of this tax!

OP, your ridiculous assertion that this will trickle down and affect every home owner in the UK suggests you either live in London or the South East.

If you bothered to consider the house prices that millions of us that live elsewhere in the UK have paid, you’d realise you’re talking out of your arse.

My first home cost 39k in 1990. I sold it for 60k in 2004. I’d actually put in a new bathroom, kitchen and UPVC double glazing. So the actual ‘profit’ after living there for 14 years was pretty small. I lived in a less desirable part of a northern city.

My current home is a 4 bed detached and probably worth about £250k. 🤷🏻‍♀️

You are so lucky you can buy your detached house for £250K

where I am they are at the lowest 900k and often where someone has left it in the 70s with an integral garage with little living space and band G for the privilege of it all

Yup. China, an actual communist country with Marxism identified in it's constitution as a guiding principle has no property tax.

It does have a 70 year lease thing though. You can't technically own the land the property is on. You own the bricks concrete, but the land is leased, and returned to the guv. More to it than that of course, but that's the basics.

So yup, comparing Labour to Marxism does not really work.

Also worth pointing out that property tax in the US is variable. If the county needs a new bridge, they can add a bridge surcharge to your property tax.

Yes. When I lived in America the special millages you refer to for one-off projects seemed constant in my city. They weren’t part of the official property tax rate.

We had a fabulous quality of life, though. Here, I worry what will happen if we should ever need the police, ambulance or fire services.

I know which I prefer

Not always. I bought mine for £130k in 2019. Estimated cost of rebuild is £600k+. Older houses were built back when labour was cheap, traditional methods are labour intensive.

Just read that there are 110 social housing properties valued at more than £2m. These will be exempt from mansion tax, even with a lifetime tenancy.

You really have won the lottery if you’re living in one of these!

Telegraph ?

Seems a bit vague that article. Council houses, social housing properties, 110 social housing homes.

Do they mean individual dwellings, or homes as in a block of flats, old folk homes etc?

The article muddies it more by then saying City of London and Westminster has 23 properties identified.

What sort of properties ?

The article is either being careless with language, or very specific.

A short while ago the Telegraph went to bat over the fact that 48% of those in social housing in London were not British (or British-Irish) born. It neglected to mention that of the others, 68% (over 2/3) of the heads of household held British passports.

Ie less that 1/3 of 48% or 16% of heads of household of those in London social housing were not holders of British and Irish passports. Other news outlets picked this up.

The implications of this attitude are that we must believe:

1. The houses are some how communal property
2. People may only own things deemed appropriate for their requirements*
3. It is acceptable for the Gov to apply punitive taxes to people who have just done a normal thing

I do not agree with these assumptions.

*deemed by whom and by what right

A tax of 0.1% of an asset is punative?

Yeah, I am not disputing what is written in the Telegraph, I am just suspicious of how it is written.

I remember an article in Breitbart last year or so. GUN CRIME UP 200% IN ICELAND. IMMIGRATION UP 300%.

All factually true, although not connected. And no numbers. Iceland having it's first double murder by gun, ever I think. And they had granted asylum to about 6 people, or something like that.

I am with you. For a broadsheet that, hopefully, doesn’t actually lie, the Telegraph cherry picks alarmingly. They all do to some extent but these examples are shocking by the standards of the genre

Yup. I can't search directly the same sources as the Telegraph, so I took a different way. What is the most expensive council house in the UK ? It's of novelty interest.

Here we go.

Most expensive council house ever: Borough Market property sells for £2.96million | Metro News

Appears to be legacy/inherited stock.

I doubt any coucils are building or buying any 2 million pound houses.

I can't say that for sure of course.

Should the residents have to pay the tax ? Yes. For sure.

The Telegraph has gone downhill

I think @Cynic17is explaining the wider economic impact of an additional tax on "ordinary folk".

Whilst you are 100% correct that most "ordinary folk" do not own a £2 million pound house, the point is that by taxing those that do will
mean that the owners will have less discretionary income.

Therefore they put off either that maintenance work or home improvements that would have paid " ordinary folk" such as builders, plumbers, electricians etc. This in turn absolutely hurt such "ordinary folk " as builders, plumbers, electricians etc.

As a central concept you cannot grow an economy by increasing taxes.

So what you are saying is that this mansion tax may reduce trickle down economics ?

I get your thinking, but it seems very unlikely, especially going by the threads on here complaining about how difficult it is to get a tradesman.

And also that £2k buys next to nothing in renovation terms. I doubt a mansion having a £100K extension built will shelve the project for the sake of £2K

Your last paragraph is belied by the American economy. It experienced one of its most sustained and successful periods of growth ever from 1991-2001, with growth averaging over 3.5% pa.

Almost all of this occurred after the tax rises imposed by the Clinton administration, particularly on high earners.

This whole debate is like a God of the gaps fallacy.

The anti mansion taxers start with what they think is a big point. That's debunked, so they find another smaller argument, debunked again, and so on.

Always trying to find a gap in the logic where they can squeeze another point in.

I wonder what will be next ? Maybe that they have to sell off part of their garden and a wildlife will be impacted.

I also noticed the telegraph article above said the mansion tax is 4.5K a year AVERAGE. Totally deceptive. They are talking about the lower bracket properties, but averaging the top and bottom bracket charges.

You are catastrophising OP. Have you thought of seeking help for your anxiety?

Exactly, and why should anybody get to choose how someone uses a bedroom? People work from home, hence home offices are required. People workout at home, hence gyms are required. People have guests and family stay over, hence guest rooms are required. Why should every room hold a person at all times? That's absurd. And nobody should get to make the decision regarding use of rooms other than the homeowner.

Let me try understand this.

We have gone from a 2.5 k tax on homes worth more than 2 million, to full on Marxism as seen in Marxist countries from the mid 1920's up to the end of Maos Great Leap Forward, in about 1962.

Is this a thin end of the edge argument ?

That the UK labour party, Starmer, somehow plans to steer the UK to the era of peak Marxism/Maoism ?

The day I can buy a £2m home the day I won’t be arsed about £2500 annual charge

Bet you agree with the bedroom tax though.