AIBU to think a £2m homeowner should pay mansion tax?

[LadyJos]

Anyone read the Telegraph Article about the 93 year-old man paying mansion tax on his £2m Richmond Home he bought for £15,000? AIBU but isn't £15,000 to £2m a fairly good return over 60 years, and shouldn't he pay some tax at the end? I can't help thinking since the home is mortgage-free, he has options here to pay the £2500 a year...
‘I’m a 91-year-old veteran about to be dragged into mansion tax. This is wrong’
www.telegraph.co.uk/money/property/house-prices/91-year-old-about-dragged-into-mansion-tax/

If you bought a house for £2 million and it hasn't gained in value then why should you be taxed for simply owning the house? What other asset are you taxed like this?

No, you’ve confused yourself.

The painting:
If sold, CGT is paid on the gain.
Theres no IHT, because the painting has been sold and is no longer part of the estate.
If it’s not sold, IHT IS paid on death.

The house:
If sold, no CGT is paid. The funds sit in the estate. Or they’re spent on a new home/care costs whatever. Any remaining funds (including the potential new home),at death, are subject to IHT. Ownership of the home meant no need for a council flat - the person provided their own home for themselves.
Of the house is not sold, it’s subject to IHT on death.

The difference between the painting and the house is that the house has provided a housing solution at the cost of the owner alone. The painting hasn’t helped society at all. The owner is housed by the council.

Why should the house owner be taxed on an unrealised asset when the painting owner isn’t?

Tell me you've never had elderly frail parents, without telling me that you've never had elderly frail parents 🙄

How is this point relevant? It doesn’t actually matter what the house looks like, it’s valued at £2m. That’s all you need to know.

This is the thing with socialism. It's a race to the bottom.

The whole idea seems such a blunt instrument. So if I own a house worth £1.9m outright, no mortgage, I don't have to pay the tax, but if it's worth £2.1m with a massive mortgage- so I actually have less in terms of real asset- I pay the tax? And no recognition as to whether I bought recently, paying significant stamp duty, or years ago so it's accumulated value?

If they had never paid any tax their entire lives, and never received any help from the state every (not only no NHS but also no weekly bin collections, having to club together with other residents to maintain the roads and infrastructure, paying poop trucks tomcome and take away their waste because there is no sewage infrastructure etc) my guess is life would have been more expensive for them not less.

Things like council tax are to pay for local services only. So it's more likely than other taxes to benefit them/their area. Yes some of it will be spent on things they don't need like children's playgrounds. But that's life.

People will be able to defer it until they die. £2m isn't such a lot in Richmond anyway. I wouldn't upset yourself and get riled up about it, it's bad for your well being. Do you know the person well.

Absolutely other taxes should be levied - they're all unpopular, and people will always try to evade them.

This tax is being levied on those wealthy enough to own properties of over 2 million. In this man's case, he was young enough not to have served in WW2 and benefitted from stable employment and all the positive social changes that happened in the post war period.

He should absolutely recognise that he has been truly fortunate to benefit from this amazingly peaceful and prosperous period in history. If he doesn't feel that he has a moral obligation to contribute when so many are struggling, he is a selfish old hoarder!

That’s the way everything works though. You don’t get exemptions from income tax or inheritance tax because of circumstances or commitments. Tax systems don’t work on individuals

Interesting. I've got to say, I would not like buying a £2m house and then immediately finding out I needed to pay a new tax on it. If it hadn't appreciated in value, I'd also find it rather unfair. Although, at the same time, owning a £2m house I would be in a better position than most of the population to afford it. I wouldn't expect buckets of sympathy.

My original post wasn't this, however. It asks, is it unfair for someone whose house has appreciated from £15,000 to £2m to pay the mansion tax? Given that they don't have to pay CGT, I don't feel it's unfair. I don't have buckets of sympathy. I understand why they don't like it. But I don't think it's unfair.

£250,000 in todays money. So not well off at all.

That’s the thing - one can criticise this man who clearly was fortunate to be able to buy that house young (my parents in 1960 bought a semi for £4k in outer London and they were older). But masses of people have houses that have not shown appreciation to that extent and are paying large mortgages.

Setting aside the mansion tax, a property tax or LVT will hammer people already paying a lot of tax and with hefty bills.

Using an inflation measure that doesn't include housing. Try using CPIH

We've among the lower tax burdens per capita in the developed world.

You can go and live in the US if you want. Health insurance costs north of £10k per person, annually, and if you can't afford it, and you or your kids get cancer, you're basically dead.

He strongly implies in the article he will be able to pay it. He just think it's unfair on principle as other people in similar proced houses might not be able to. Which is a noble concern for him to have. And hes entitled to not want to pay the tax/to resent it. But the overly emotive and dramatic language from the Telegraph itself is a bit OTT.

Earn it? He isnt even made it. His house just happens to be worth 2mill now.

But not everyone who lives in a £2 million house paid £15k. Lots of people have paid the full amount and paid lots of stamp duty already. Why should they automatically pay more tax again, especially when they had no idea this tax would be introduced at the time of purchase? Also loads of people's life circumstances change so this mansion tax could mean they are forced to move home. Do we really want this?

Most of us own some luxuries. I have an expensive watch for example. I would be gutted if I suddenly had to pay an additional tax each year just because I owned it. I am very sentimental about the watch and would be even more gutted if I had to sell the watch because I couldn't afford the tax. Nothing we own would ever really be ours.

Do we really want to set this precedent with anything we own? Cars, watches, houses, pets?

And if their life circumstances change, let's say through losing their job or by having a life-altering accident, the state will be there to support them.

Do you understand how tax works?

You're right (in part). You're wrong in other parts.

With the painting, you're right that it does not need to be sold for IHT to be paid - IHT can be paid purely on the valuation.

Same with the house. It does not need to be sold for IHT to be paid.

However, if and when either the painting or the house IS sold, the painting is subject to CGT and the house is not.

I'd still rather the house.

The state won't pay the mansion tax for them or allow them to keep their home because their circumstances have changed Do you understand how tax works? They don't get back more from the state because they paid more in. Usually it actually works the opposite way around.

I think the WEF already told us that we'll 'own nothing and be happy' (Klaus Schwab). Don't know if I've spelled his name correctly.

The corporations believe that whatever we have belongs to them and we deserve to be bled until our last breath. So, subscription models and renting for everything. Homes, vehicles, washing machines, entertainment, fridges, pets, the lot. Bleed. Them. Dry.

Ideological, like I said.

People will be taxed out of home ownership. The 2 millon semi in Richmond today, the shitty, damp terrace tomorrow.

Why are your morals about what someone else does with their money?

Your question doesn’t make sense.

Again you say "morals". Why do your morals involve seizin the assets of others?