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/

Yes we are already doing a great job of redistribution compared to lots of other countries but there is a real failure to acknowledge this. Look how we shoot up the wealth table when we look at Median wealth (i.e. how much the average person has if we line everyone up and select the middle person) versus if we look at mean (overall wealth divided by population). Pretending we are like America etc is just so wrong and yet so many people seem to have fallen for it.

https://www.visualcapitalist.com/ranked-the-richest-countries-by-average-and-median-wealth/

Yep. As I said, I am largely pro-redistribution. But looking only at my own individual circumstances, and the sacrifices I made to get where I am, based on how well off I now feel, I don’t think it was worth the missed school plays, lack of social life, missed time with friends and family, giving up hobbies etc. I’m about to scale back massively on my hours and effort because the after tax returns are no longer worth it to me and I’d prefer to have the time. I will absolutely not be the only person doing this, many NHS consultants have already done the same, so there has to be balance.

This is all wrong and there are some vile, envious and entitled people on this site.

I don’t get why council tax is tied into house prices. It’s about paying for services, used by individuals. The poll tax was actually the fairest solution.

Most of the affected properties are far from being ‘mansions’. You can have someone living in a relatively cheap mansion sized house in some areas of the country and another mortgaged to the hilt in a small house near London. But the London house will be considered the ‘mansion. Just No.

They also have no mandate for this crap. I’m sick and tired of politicians floating ideas to the media.

top 10% is people earning over £72k pa so a lot of them will be employees on PAYE.

I actually read about this. They were made to pay the costs for their own flights out of the country.

The UK will never do citizenship based taxation because it's a massive data blindspot and it'll violate numerous international tax treaties.

@DontKillSteveThe politics of envy has long been a Labour vote winner. It’s divisive and certainly does not promote people wanting to do well at work or growth in the economy. It stifles ambition. No country has equality and the poorest here don’t work at all. Why keep punishing those that do and are successful? I also think those who use services should pay and an individual tax is fairer. We have families with 5 earning but one council tax paid. An individual tax for services is the best way but that does not tick the envy box.

That's top 10% of income and those people also pay the most tax. The wealthiest people aren't the same as those with the highest income (though there might be some overlap). You could have billions and, in theory, receive no salaried income. It's comparing apples with oranges and thats the point the other poster was making

There are quite a lot of people in a similar situation to this man near to where I live. It’s a part of London that was down at heel for a long time and cheap. Things changed and property prices rocketed. There are now plenty of elderly people in 4 or 5 bedroom Victorian houses worth at least £1 million if not £2 million.

It doesn’t make sense to me to tax that gain when the gain is unrealised. At the point the elderly person dies that property will form part of their estate and be subject to inheritance tax. That seems fair to me.

Why shouldn't he feel entitled to it in its entirety? It is his house. Sure he got lucky with the increase in value, but it doesn't sound like he is planning to sell so he won't get that money, his family will when he dies and they will pay inheritance tax on it.

The irony here that people seem to think he is wrong for feeling 'entitled' to live in his own home and not suddenly have to pay extra to do so, but they think it is perfectly reasonable for the government to take from him and in turn use that money to fund all sorts of handouts. This man is not the entitled one.

Property is subject to capital gains. Ask any landlord….

To have an asset that you've literally just sat on and it's increased in value to such an extent that it's now worth that much - and especially since we have a housing crisis - absolutely should be taxed on its value.

People are struggling so much with the cost of living crisis and taxes that are already heavy on working families cannot be taxed more. It's time to tax those that are sitting on assets. The billionaires should be also taxed massively more but unfortunately pay to find ways to get round it.

I disagree. We shouldn’t tax unrealised gains in my view. But that’s fine, it would be boring if we all thought the same!

Historically, buying property has been one of the most reliable investments, consistently generating returns.

Dismissing this reality is disingenuous!

Aside from greed or jealousy, why do you feel the need to tax the man’s house?

you realise that he’s already been taxed:

1. he’ll have paid stamp duty
2. (assuming he paid for it / his mortgage through income) he’s been taxed on the money he earnt to pay his mortgage / deposit etc

So many in our society need to shift their focus from “how can I take more of other people’s money (ie increase other people’s taxes)?” to:

1. how can I be more self sufficient to need less handouts
2. how can the state operate more efficiently with the money it does have
3. how can we limit the extent of what the state feels it needs to get involved with to avoid us having ever more increasing costs

❤️

Is the size of the return is partly what’s driving your obsession, would you be equally happy to support an investor who has lost the guts of £2m? I suspect your views might well be very different in that case…..

This demonstrates your financial and economical incompetence or at best naivety.

for example, your model would discount:

1. if an area becomes more or less attractive
2. any upgrades (extensions, new kitchen, etc etc)
3. costs of maintenance and repair

to list just a few….!

given how you seem to dislike living in a society that operates as ours does, why don’t you move to another country that operates in alignment with your (somewhat very left wing) views? Have to admit I can’t think of any successful countries that would fit the bill so I wish you the best

Yip. Confirmed. Jealousy.

BTW. You’re making horrendously large assumptions around how folk may have afforded their homes.

Maybe they don’t have “humongous” incomes. Maybe they were inherited (with IHT paid). Maybe they were bought with inheritance. Maybe they were bought with the proceeds of a realised investment. Plenty of options…. None of which are anyone’s business apart from that individuals.

How else do you suggest we pay for the needs of public health, education, social care and infrastructure that we have now?

That man living in his 2M house has benefitted from 60 years of a peaceful post war Britain, and all the advantages of a society that a decent standard of living for all can bring. Families are struggling with the cost of living now, even with two people with full-time jobs - without the stability of income that he had (he obviously had all his life, otherwise he wouldn't still be in that house).

The population is aging, and we need to find the money to care for them somehow. Taxing expensive property is a fair way to do this!

Greediness is surely amassing wealth through no effort - everyone knows that property historically is one of the best ways to accumulate wealth, and to pretend otherwise is disingenuous in the least.

I would say that the UK, as one of the first countries to establish a modern welfare state, has long been a champion of equality. Paying taxes and holding those in power accountable is part of creating a stable, peaceful society. If you don't like this aspect of the UK perhaps YOU should move - to a rogue state where tax (and the rule of law) is optional and violence is rife?

No it isn't fair to tax someone's home. The majority of people on this thread don't think it is and the government has no democratic mandate to do it. There are loads of different ways we can raise tax and more importantly cut spending. I honestly think you would have a completely different attitude if it started to impact you. You would realise that actually your home is never ever your own.

The problem is that it’s plainly ridiculous to call a tax a “mansion tax” when the mansion in question is a three bedroom mid terrace property with a 5m x 4m garden.

Introduce a wealth tax and tax Amazon etc properly before squeezing the middle class more!!!!

Right! So we need to cut costs - where should we start - stopping funding NHS care for the over 70s, perhaps?!

Oh come on now! You can't genuinely believe that this is the most obvious area for spending cuts. There is lots of inefficiency and waste. Look at some of the levelling up projects for a start.

Agree that we should tax the digital giants and Amazon much much more.

But taxing property worth over 2M is a kind of wealth tax. It's taxing an asset. It could also include other assets.