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.

The actual rich people will be more likely to find a way to dodge it.

The actual rich people will just cough up. It’s small change if your means extend to owning a £2 million house. They’re not going to go the expense and hassle of trying to dodge such a paltry (to them) sum.

We’ll have to disagree then. I know people both in and outside London who live in houses around the £2m mark who will struggle to find the extra for the new tax and will also now take a hit on the sale of their home if they downsize.

@WaryCrow but the problem is that some of the “down-trodden poor” are now better off than the “wealthy” schmucks with a job and a mortgage. That is what is driving anger now.

We can all sneer at £2m house dwellers. But given that there are not a lot of them, do people really think that the axe is not going to fall on anyone who has the nerve to own a house? As I said upthread, revaluation will find us all in higher bands with hugely higher bills (atm councils can raise charge by 5% annually and that is bound to change).

Apologies. I wasn’t clear.

If you have bought a house, say at £1m, with a view to significantly remodeling and improving it, with the intention of improving its value, flipping it and moving onto the next house (which lots of people do) - you will now think twice about doing that.

I didn’t mean those currently sat in a £2M house wouldn’t spend money to fix their boilers.

I don’t think that’s a bad thing.

I guess you / your family members are not tradespeople then.

Where I live, tradespeople make very good livings, along with significant cash transfers, doing major renovations on properties. It’s a lucrative business for many people earning reasonable salaries.

There will be an impact and there is genuine concern.

I don’t think inflating an already overblown property market is positive.

I still disagree with that view

Is there, really?
So people in homes valued at say £500k don't do any work on their homes?

Houses round here are worth about £1m and when one lot of scaffolding goes down another goes up even with the high CoL. Has been the same for years & I bet it doesn't change.

There is a lot of money around and people earning good money who will still be doing up their houses.
Again, scare mongering I think.

The amount of people that threaten that high earners will leave the country if they're forced to pay a little bit more tax is hilarious.

Nobody is going to up sticks from their £2millon + house and leave the country because they have to pay £2500. Pathetic whining from rich people about having to contribute to society is quite tedious when tax reforms almost always hit the worst off the most. Let's not forget that before they came after millionaires they started on disabled people who are scraping by on a pittance yet still they want to cut welfare benefits driving more disabled people out of work and into poverty.

It's so odd that people think millionaires and billionaires need protecting from a tiny bit more tax. They'll survive.

Nobody is saying that though. A few grand a year is not going to make the wealthy not wealthy.

The Reeves budget is a million miles away from the Mao actions of mid 20th century China. Your post might apply to that.

I just tried to think of example suggestions of how the wealthy might tighten their belts a little. You know, along the lines of drink less lattes, cut down on the avocado toast.

But for a couple of grand a year, I can't think of one.

Buy a Ford instead of a Merc ?

Buy a Rayburn instead of an Aga ?

Nah. They don't work.

This is my main worry!

You spectacularly miss the point.

The current taxation proposals damage aspiration for the young.

We need people to want to improve their own situation, create wealth. That’s how a country grows and prospers.

If aspiration for the young is dependent on inflating the property market they need to adjust their aspirations. Most young people aspire to buying a house, the biggest favour government policy could do them is let some air out of the property market so the affordability of residential property improves.

I think it will get regionally adjusted. £2m in London, £1m Birmingham, £4.50 Hull etc. That seems the only way for it to be fair.

Most will probably just reduce the gardeners/cleaners hours a bit to compensate .

Spot on, no one with a house worth £1.5m will pay to improve it = less work for tradesmen.

Yes why not do it with 2nd properties in that way and I think MO properties need higher council tax always, at least

I agree it’s unfair on families in London. Houses are so expensive here and are fairly modest at 1.2 million

Huge unearned wealth! What about the people who bought their houses this year who work hard and have a massive mortgage!

Well said

such a cheek

The post was quite specific about property bought 40 years ago. There was a bid for sympathy this week for someone whose house cost £100k and is now apparently worth £2 million. That’s who @mamagogo1 was talking about.

Well stop worrying about it.
Imagine being on a low salary and not able to even consider buying a home.

Honestly the perspective on this thread and most of MN is nuts and so skewed.

But another expensive latte, enjoy splashing cash on Black Friday deals and stop panicking.

And this is the crux of the argument. Either:

• Someone bought a house years ago for £100,000k and it’s now worth £2M. In which case they’ve made a staggering untaxed profit of £1,900,000 so they have a brass neck to complain about having to pay £2.5k a year (to effectively bring their CT in line with the rest of the country. Or
• They’ve bought it recently for £2M, in which case they’re truly rich and can afford an extra £2,500 a year.

No no. Wealth tax is for Other People. Pretty much all advocates of it assume that “the wealthy” does not include them.

If you’re losing your £2m home for the sake of £200/month something has gone astray somewhere.