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.

Well in the words of Keir Starmer "I don't think you can tax your way to growth" June 2025.

Alternatively I prefer Churchill's quote :

"For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle".

On your example of US economic growth between 1991 and 2001 the increase in taxation if anything slowed it down. A simple google search will show you that the reasons for US economic growth in this period were:

IT revolution
Productivity growth from technology advances in manufacturing
Investment boom
Dot com bubble
Fiscal discipline and a balanced budget
Tight monetary policy keeping inflation low
Low oil prices
Trade policies- 300 new trade deals

It’s the owners who are liable for mansion tax, not tenants. In this case the owners are the local authority. The government would just be charging themselves.

The tax increases contributed hugely to bringing down the deficit. In turn this created a stronger economy, lower interest rates (for good reasons) and, crucially, promoted investment. All of this contributed to growth, which the UK desperately needs.

I have just done a search on the neutrally worded question ‘How did the Clinton tax increases affect growth in the 1990s?’. The only sources hypothesising a slow down are those with right wing bias like the Heritage Foundation, etc. The others are neutral to positive. None of this is to deny the other factors you cite. But could the tech boom, advances in manufacturing and investment boom have happened without the favourable fiscal climate? To say nothing of the tight monetary policy?

I lived in America during much of this time and I remember the relief felt generally as the deficit became tamed.

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I don't believe that assertion which has been made before.
I live & work near an area where there are some such homes and I can guarantee you that the residents there will still be renovating them. Because these are the lawyers, financiers, bankers etc who are on very high salaries with handsome annual bonuses on top.
Obviously there will be some in £2m houses who will tighten their belts but this will not be the majority.

I meant to hit YABU.

Don't be ridiculous.

I can.
would you honestly trust this government to not change the goal posts?
you are already paying several thousand in council tax, as well as this new tax. What do they get for their money? Gold plated bin bags?

I was simply agreeing with someone else's comment regarding the absurdity of some people thinking others should give up their larger homes bc some people don't agree with the way they use their extra rooms. Ie: older couples with bigger houses and rooms being forced to give up their homes for a family with more people. Hopefully it never comes to that in the UK but I wouldn't put it past Labour.

Yes they’ve paid for their house, leave them alone.

That isn’t how tax works. And this is nothing to do with council tax.

So I agree that a tight monetary policy and a balanced budget create economic stability and lower interest rates that in turn creates economic growth.

The question is how do you achieve a balanced budget and that is either by increasing taxation or cutting spending. Right now with tax levels at their highest in over 70 years then further increasing taxation will without any doubt further slow economic growth- we have already seen evidence of this- the NI on employers increase, large numbers of wealthy Brits leaving the country. And despite this the annual deficit is over £100 billion and national debt as a % of GDP also at record highs.

But if you want to balance the annual budget by cutting existing spending then I would be in full support but you are unlikely to get much support from Labour backbenchers.

But it comes back to the central point that you can't grow the economy by increasing taxes.

No the people who find themselves with any above average wealth have to subsidise lots of others. And people like yourself seem to revel in it. And don’t think this will result in a fair society, as it won’t. Companies are not recruiting as much due to the NI employer rate increase. Our graduates can’t find jobs. We need employment growth, not thousands of failing companies. So as the rich get poorer, who will you look to then?

If you are talking about graduate jobs I think you will find the lack of recruitment is often down to world wide issues and uncertainty rather than simply the NI rise.
Not everything is down to that one policy.

And a lot of larger companies could have sucked that up anyway but chose to put profit & shareholders first and deliberately chose to reduce worker hours, lay people off or not to recruit. In short, they put it back on to workers at the bottom of the food chain rather than affect those at the top or shareholder dividends.
This is the kind of nonsense that is going on which needs to be stopped.

Every time a large company declares it's profits they are up and this even since the NI increase.

The welfare state, but who continue to fund it is anybody's guess. Reeves truly is incompetent.

Graduate recruitment is down in a large measure to the use of AI to do the work that used to be done in entrant roles. We’re not going to get employment growth in white collar industries as the use of AI grows. Any growth will be in industries where human input is essential, it’s why many young people are shunning university and the attendant debt in favour of apprenticeships. The world’s changing fast.

I’m more shocked that they’re going to have to revalue Band F, G and H homes to find out the £2million homes and my band G is only worth £380,000

I’m delighted. Ours is Band F and highly likely to go down a band.

@RedTagAlan I wonder what will be next ? Maybe that they have to sell off part of their garden and a wildlife will be impacted.
They could let their garden get really overgrown, which will both devalue their house and be good for wildlife. Win-win!

And then George Bush got elected (thanks, Florida) and the US hasn't seen a surplus since. His policies even caused a global recession. So much for the Republicans being "good for the economy".

I mean, I have a nearly £1m house (in a part of the country where most people don’t have £1mil houses). I wouldn’t really consider myself ordinary folk. I consider myself quite well off folk. Anyone with a house twice as expensive as mine definitely needs to pay more tax or sell up if they’re living beyond their means.

Sorry but I cant get to worried by this cos I'm so far away down the housing chain that im actually laughing wondering where all these people with 2 million are!
If you put all of our famileis homes on the market together we still wouldn't make 2 million!!
And i agree if uou can afford a +£2million home are you going to worry about 2500?

Thanks, @mindutopia . We are in a similar position

PS and I agree with you!

University applications are down because the interest rates on loans are scandalous.
There are less apprenticeships available. We are heading for disaster. But I do know someone who is very busy - they work in restructuring and insolvency. Never been so busy.

There are more apprenticeships, not fewer. University applications are down because of the declining number of graduate jobs you just told us about.