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.

Labour is tapping into the northerners hatred for them down south in their expensive houses…

It's the politics of spite and envy. As per, with Labour.

Haha no

will place downward pressure on the prices of houses

Good

As someone whose next house is likely to cost in the region of £1m, I wouldn’t even be close to being put off by a £2.5k annual charge. And a £1m property isn’t even caught.

But not everyone paid 30p for a house in 1972. Some have huge mortgages. Good luck with taxing my “wealth” - the building society still owns a good part of my house.

There is apparently to be a reassessing of bands by drone or some such. What’s the betting that 70% of homes suddenly find themselves in at least band G….

OP, you are wasting your breath. Most people posting on this thread can’t see past the end of their own nose, let alone imagining how taxes suppress the entire market.

In any case, the small minded people are too jealous of anyone who lives in a better home than them. So they’d rather suffer in envy than see the bigger picture. No wonder this country is such a mess. A race to the bottom.

If 150K stamp duty doesn't put you off the £2 mil house, then I don't think a £200 monthly charge would really impact it.

And if you have benefitted from vast inflation of house prices (i.e. bought 40 years ago for £40K), then it won't impact current sales.

If they aren't be able to off load them their value will decrease, problem solved

ordinary folk

It really sets my teeth on edge when multi-millionaires are rebadged as whimsical little "folk".

These "folk" are most likely astute enough to realise that if house inflation is running at, say, 5%, they are still better off buying a £2.1m house than a £1.9m house and benefiting from the increased rate of appreciation of their asset, even taking into account this tax.

And £2m houses in Wandsworth currently benefit from substantially cheaper council tax than £2m houses in neighbouring Clapham, with a far greater effect on the monthly bills than this proposal. And house prices in Clapham have held up marvellously.

When I lived in America the property tax in my city was about 2% pa.

In return our city services were excellent and quality of life was high. Here, we worry about whether the most basic, lifesaving services will be available when we need them.

I know which I prefer and I am not coming from a place of thinking that others should pay. When I’ve supported taxes that apply more directly to my family on other threads (our house is not worth £2M) I’ve been accused of being wet and worse.

One cannot win.

But if your house is £2m+ but you have to sell for £1.7, then surely the new homeowner will challenge the £2,500 excess fee as the house is no longer a £2m one

A shortage of 2 million pound family homes?
There isnt though, is there.

I think they'll just keep extending it downwards until all homeowners are taxed.

I don't think many people will be losing sleep about the £1.5m-2m property market to be honest.

Yes

First post was spot on. I couldn't quite believe what I was reading in the OP! Im no fan of Labour just now, but it's like the last 25 years of the decimation of public services , including criminal justice, never happened ( remember that the Tories failed to mention that they had not used allocated funds to build new prisons, etc). But Labour should have rebuilt the nation within 18 months?! Labour are chastised by the media for mentioning the legacy of the torys, yet the torys were allowed to bang on about the 2008 crisis, instigated by the US , being labours fault for a decade. Serious double standards. Labour needs to get its communications sorted

That’s the minimum. It’s up to £7500. But I agree with you.

That is what politicians hope for. The ignorance of the masses who celebrate because they think someone else will suffer. They do not think what this policy will eventually mean for them over time. They think price depression will magically affect only million pound homes. They think the effect on the property market will remain in the South.

People who are financially successful in life aren't so because they are asleep at the wheel. They will take measures to reduce the impact. They will adjust, they will move, etc. That is why, in the end, the net tax raised will be a drop in the ocean but the outcome will be a blow to the property market (which is vitally important in getting the economy moving), resentment between those who consider themselves strivers and those who are considered takers or envious of wealth.

So many wanted higher taxes on those they consider to be "rich" except the fiscal drag, which will continue for at least 3 years, will ensure that every day folk will be paying a lot more at a time when the cost of living is high and cost of servicing a mortgage is much higher than it was even 5 years ago.

No.

It is already harming ordinary people. But the comrades of mumsnet despise reality and are venomously hateful of anyone who is over 60 and dares to own their own home, so don't expect any normal responses here.

This will be my only contribution, as the barmy squad are out in full "If I can't have it, nobody can!" fashion blaming old people for the shitty mess the government have made of the country and young people's hopes and dreams.

I won't be reading any responses or replying to them. You're right OP, just wanted to point that out.

I really don't think in three years my house will be worth 2 million.

Or my mum's. And she's close. If her house does exceed 2 million we will be thanking our lucky stars rather than bitching about a 2% tax

That's because you cannot see past these people because of your envy. You're assuming that this tax will never have consequences for you but it will. It will have an impact on the entire property market. On homes that are just £300k.

Some will say it's good that house prices will fall across the board. Is it really good? How so?

The politics of envy causes people to overly focus on others rather than on how some of these changes will affect them and ordinary folk. Instead, as long as the "rich" gets soaked, they are kept distracted and happy.

A person who can afford a £2m probably can afford paying higher taxes but that does not mean they don't care to do so. They will find the loop holes or they will find ways to reduce their tax burden and where they can instead buy a property below that threshold, they will.

Nobody in a position to buy a £2 million house is going to give a shit about paying a £2.5k a year surcharge. It’s a rounding error in that context - around 0.1% of the value.

Anything that helps to stop house prices rising is a brilliant thing for the country.

Personally I think if it has any effect it will be only to compress the pricing sadly, lower house prices will still rise.

What they should have done is abolished council tax and replace it with a property tax based on either the value that council tax was based on but uprated for inflation (if it hasn’t been sold since 1991), or the last sold price; maybe .5% per annum across the board.