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.

And that's what makes this tax punitive and politically motivated, rather than financially needed.

It will raise a negligible sum of money, yet it will make people lose their homes and bring insecurity to families and will distort the housing market.

It's pure class warfare, unless it is designed with fiscal drag and dropping of threshold in the coming years in mind. And even then.

What worries me about this is that there are quite a few people (mainly ethnic minorities) who bought houses in places like Brixton, Hoxton, Dalston, Notting Hill in the 70s and 80s when they were absolute shitholes and you could buy them for peanuts. People who were things like bus conductors and auxiliary nurses or builders, many of whom only have state pensions. But their houses are worth £2 million now. It’s just going to drive more of the working class out of London. It’s also unfair on their kids if they have to sell up and go elsewhere and their houses are bought by wealthy people who will see those properties continue to appreciate in price and pass it on to their kids while the original, poorer owners will miss out.

My Mum and Dad bought a house in an untrendy area of London for £16,000 when Mum was a part time secretary and Dad was a teacher. It’s worth £1 million now. Dad has died so Mum doesn’t even have his whole pension and hers is not good as women weren’t allowed to join many pension schemes for much of her career.

They were lucky at the time they could afford to buy there and not have to resort to the really gritty inner city areas. My Mum is lucky now because if they had she’d have to sell up.

If it doesn’t actually net the government any money I can’t see the point of it. Unless, like PPs said, it’s the start of a slippery slope to tax everyone’s property in this way? But again, that would adversely affect the housing market, people wouldn’t move, less stamp duty. But, perhaps that is the point? They want constant tax from your property, irrespective of whether you move or not?

Yup.

I was wondering, if the budget had slashed tax for the rich, slashed welfare spending, would the rich be on the telly calling it a terrible budget ? Think of the poor, think of the poor !

Hell no.

When did it change to " Think of the poor rich" ?

And that if you are not thinking of the poor rich, supporting and campaigning for them, that you are just a jealous nasty person that does not understand economics.

Anyway, what will we call the crowdfunding page ? Excellent idea by the way.

" The masses against the mansion tax".

"Save our beloved elite".

"Homes for fatcats"

:-)

None of the tax rises are going to increased services though, because the budget contained no new money for health, education, local councils or social services. In fact it reduced education funding by removing any provision for SEN. The tax raised is to cover increases in the welfare and state pension, and the setting up of more quangos and departments to restrict civil liberties.

I live in London in an area where most of the houses are between £2-3m The people who live there are not ordinary and none of them are worried about the new tax. I don't think people who are looking to move to the area are bothered about the tax.

Ordinary people do not live in £2m houses even in London.

My house is actually on the market (worth less than £2m) - so let's see if there's a sudden surge in buyers for it!

I think this is the most sensible comment on this thread. Thank you @Circe7.

Op are you seriously hypothesising that paying an extra 2,500 grand on a property worth 2 million, would somehow trigger a domino effect that would result in 300 grand homes eventually being targeted and an explosion of HMO’s? Your hypothesising is a cynical example of targeted scaremongering of the masses to protect the privileged.

Of course I appreciate that because my parents have done that all their lives as have I.

Quote : " ......and departments to restrict civil liberties"

Governments that want to do that tend not do budgets like we have just seen, and are here discussing.

I’m retired.
There is no way I will move to a house with less than 3 bedrooms as long as my dc and dgc want to visit.
Call me selfish but I bought my house with my wages.
Me and dh didn’t split up requiring two family homes.

We cannot let a few people affect progress. They have to suck it up for the greater good

Or take in some ironing (the housekeeper can do it!)

Exactly this.
Many of the people fretting about people living in £2m houses in London & the South East don't live here & have no idea what they are talking about.

Believe me people in £2m houses in London have been underpaying council tax for decades & can easily afford the rise.
Stop crying your tears for them because they don't need it.

Do you think the Tories will reverse the tax if and when they get in?
It doesn’t affect me, my house is up north.

They’ve paid what they were asked surely, their demographic is such that their is less deprivation and council costs are lower.

"it's worth one million now".

Yes ONE million, not two.

You are right, there are a lot of houses that were bought by ordinary people decades ago that have rapidly gone up in value but very few to the £2 million mark.

If the rate had been set at £1m it would be a problem but it hasn't for exactly this reason.

You even say yourself that your parents house is now £1m so they aren't affected.

Instead they have done very well for themselves due to huge rise in property prices that now make it hard for young people to get on the property ladder.

You, in turn, will no doubt do well when you inherit their house.

I dont think this tax will cause an issue, but i think its a start point. Thresholds will be lowered and fiscal drag will occur and within a decade much more people will be caught up in it.

Great thinking comrade, Lenin would approve.

I don’t agree that it’s for the greater good. This tax will raise only 400million by 2030 so it’s quite a small amount overall. It’s purely ideological to satisfy the hard left of the Labour Party.

@LimeLollipop

Here is what £1.8m buys in Dalston

this is 1800 sq ft. That’s a bloody big house . We’re not talking about ordinary folk. My family home is 800 sq feet big

https://www.rightmove.co.uk/properties/169535075

London boroughs are big and in every borough there are large pockets of deprivation.
You will be hard pressed to find one that doesn't have that.

It’s a spite tax, Designed to win votes and peddle the narrative ‘we are taxing the wealthy’ …… there will be many unintended consequences …. Including in the reduction of spending on home improvements

But that is a good thing.
We have become an increasingly divided nation with the rich becoming steadily richer.
How often do we see large businesses failing (eg water companies, rail companies) but the big bosses are the top still receive their huge bonuses each year?

Supermarkets bemoan the extra NI & NMW they have to pay but still report record profits each year.

Something has to change & these measures illustrate that Labour are trying to change things.
Unfortunately they are still too scared to go far enough as far as the super rich are concerned which is a shame.
Because allegedly they will all leave.

Have you ever heard of the ‘Laffer curve’? If not read it.