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.

This isn’t the wealth tax everyone is calling for. This is an example of the type of wealth taxes that have failed in multiple countries; a tax on main residences. This type of tax doesn’t take into account overall wealth and is taxing wealth at too low a level. We need to be looking at overall assets, targeting the very wealthy who live on passive income from their assets. Those who have over £10 million. We are looking for wealth to be redistributed as it has unfairly been moved from ordinary working people and pensioners who used to work, to the multi millionaires/billionaires who live off assets/passive income, over the last few decades creating increasing wealth inequality. This tax doesn’t address this at all. So this is not the wealth tax being called for.

Exactly.

I think ALL income should be taxed in exactly the same way as PAYE.

I’ve just looked at Wandsworth council tax. Their band H council tax PLUS the mansion tax is the same as I pay on my £700,000 band F (in the north).

What are they whinging for when they’re paying a pittance in council tax in the first place?

No it's not.
This is such a nonsense thread again with plenty of hand wringing about poor old wealthy people in their £2 million pound houses having to pay a bit more.

If you can afford the house it's pretty certain you can afford the extra tax you are going to be required to pay. If you can't then you will have to sell up & downsize.

And if you are one of the elderly widows Farage was worried about them maybe equity release would be a good option. - watch out though because your Gen X children will panic about the potential loss of their inheritance. Although maybe you already signed that over to them to avoid them paying inheritance tax - in which case ask them to stump up for the extra tax.

I think now it's been introduced it'll be easy to downgrade it. Next time it'll be £1.75m - it'll just keep sliding down (like all other taxes - they'll need to raise more every time because we have to keep paying more towards the increasing numbers of non-workers - the percentage of pensioners/people with incapacity is increasing and no gov of any flavour is willing to tackle this problem.

But they don't slide down. They just stay the same, which is Tory policy during austerity.

So it's ok for the poor but not those that own 2 million houses.

Which is nuts.

Good to see that some are paying attention. If you own your own house, have saved into a pension then you need to be aware that this is only the beginning. This mansion tax has brought in 2 things - taxing people who live in an expensive house (and assuming they can afford it and should pay just by the fact they have the audacity to live in an expensive house) and deferring payment.

The deferring payment is the one to watch for anyone who has built anything. I believe all parties will start to look to take anything from those that have built assets. We are nearly at the point where you might as well not bother as taking personal responsibility is seen as a mugs game.

A 2 million pound house is not your entire life assets rolled into a property unless you're a complete very well paid financial idiot.

It is beyond the ken of most British tax payers.

It is not by any stretch of the imagination a normal or average UK wage outcome.

Stop with the nonsense.

What nonsense.
If it's so great to be on benefits & not working then you are free to try it as is anyone else.

But you know it's not because it's actually a precarious way to live and you are at the mercy of government changes, you are unlikely to own a property so are at the mercy of unscrupulous and unregulated landlords who can sell up at any moment, you are likely to be reliant on only the state pension in old age and possibly a reduced level of that, you are unlikely to have any savings to act as a buffer when you need it.

But maybe I am wrong and it's the amazing lifestyle you suggest which means working & saving is now pointless. Please try it and report back here with your findings. If you are brave enough.

Is it my imagination, or has Reform totally transformed this nation into one of financial wizards ?

I am semi jesting here of course, but I remember when budgets were about 2p on a pint of beer and 5p on a packet of smokes.

Now everyone is worrying about how very rich folk will pay an extra couple of grand extra tax a year, and how this will "trickle" down to impact on the cost of living for a minimum wage worker,

Has Maggies vision of a nation of middle class, of investors, stock exchange dabblers really become true ?

I think it has gone beyond that tho.

With Maggie and her pal Reagan, we were promised trickle down economics. That if the rich got really really rich, it would trickle down, a land of milk hand honey,

That never really happened though did it. What actually happened was the rich just got richer and richer, and kept the cash.

And because trickle down never really worked, it has changed to trickle up, That somehow, the rich must be pampered, looked after, cosseted, and that the masses must now subsidize them.

For why ?

That the rich might leave, and the trickle down that never happened might stop ?

:-)

I agree, there has been a massive shift in people's views of money and wealth in recent years.

It seems absurd that people are genuinely feeling sorry for/outraged on behalf of people living in houses worth more than £2m who might have to pay a bit more tax each year.
But the media are generally so biased & have spun this budget so well that we are constantly presented with these middle class sob stories. ITV news in particular painted an incredibly partisan view of the budget.
I suppose it's no surprise given that media outlets are run by people with houses with over £2m who have been happily paying their huge bonuses into their pension schemes for years.
Maybe we should start crowd funding for them all?

No. Ordinary folk dont live in homes worth £2m

i keeping seeing posts like this. Posts saying council houses in London are worth £2m . Posts saying yhe average London home is worth £2m

its bonkers

What exactly would the problem be with valuing properties at just under £2 million rather than just over?

Only in Central London. In practice "ordinary folk" tend to end up moving towards the suburbs where property values are considerably less. We live in a standard 3 bedroom semi with a garden in Greater London; houses in our road are going for £650K-800K at most.

I live in London and round here it's only the houses in very wealthy areas that are over £2m.
There are plenty around £1m - £1.5m that fairly ordinary families live in & these are worth that because of how prices have risen over the years.

I would say £2m is a fair level to set the extra tax at.

But the money is going to central government not the local council.

This and that it’s a stepping stone to a broader annual property tax (which might ultimately replace SDLT) because it would be easier to introduce e.g a £1m threshold once the tax is set up. It’s politically and administratively difficult to introduce a general property tax so this is an easier and more acceptable way to start the process.

It would be odd imo to go to the trouble of setting up a new tax if it’s only going to be used to raise such a relatively small amount of tax.

This.
Council tax is actually low on expensive houses & has been for a long time.

It’s like 2k a year, if you can afford the mortgage on a 2mil home you can afford 2k annually.

you don’t appreciate that many families have been living in their homes for many years, working very hard and diligently paying their mortgages, it’s just another tax on success driven by envy and spite.

This is spot on. It’s the start of an annual land tax that will eventually impact everyone.

Its short sighted but you arent going to get traction with logic here.

There is going to be pressure downwards and "normal homes will be even less accessible for young millenials and gen z.

Your point re houses being broken into flats is SPOT ON. Its happening near us. All come with £££ service charges and bloody leases with exponential fees.

Will it motivate asset rich cash poor golden oldies to move... maaaaaybe???
But equally maybe they'll switch to waitrose own brand and stay in the house they've lived in for 50 years...

Im just embarassed by this governmment and budget ...Especially given rachel studied ppe...

'The politics of envy and spite'

Please. Our wonderful country is in a shitty financial mess. We have the stuff that other countries have (the global stuff like covid hangover, Ukraine, Trump, climate change impact on food). Then we have the impact of brexit (that we're not supposed to mention but was widely predicted).

If we want all the services, we have to pay for them. Charging people who have very expensive homes is one way of doing it. Frankly, it's one of the least controversial ways.

Pay your taxes.

Have you ever been to Clapham/Wimbledon/Richmond/Primrose Hill/etc? None of those are in central London and all of them have plenty of middle class professionals in £1.5-£2m+ houses. Already paying through the nose for childcare.

And no, I don’t live in London, but I think this policy is woefully ill-conceived and directly contradicts the government’s stated objective of fostering economic growth. Don’t get me started on the tax on pension contributions.

House prices haven’t increased in Central London for 12 years.