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/

I'm surprised the Telegraph hasn't done an article on social housing worth 2M - that sounds far more up their street than wealthy Tory living in one of the UK's most exclusive postcodes has been asked to pay 0.125% of his house value in tax! 😂

Instead of making this about ways we can penalise people who have less, and don’t actually own the expensive property and therefore the asset - just make the tax fair.

If you own a £2m property, regardless of if you live in it, it’s £2.5k a year tax. The owners of those social houses pay it, the elderly chap we’re discussing here pays it, the many people a few miles from me in Prestbury pay it.

It is their home in all of those cases, but the owners of the asset pay the tax.

Unless you just don’t like HA tenants. Which is a different conversation.

I just can’t grasp why people should have to sell their home to release the equity. So an example is

My Nan lives in a standard 3 bedroom dormer bungalow. Worth approx £140,000 now, she bought it in the 60’s for £4000 so in theory has made £136,000 due to house prices rising, so going off peoples assumptions here she has that in her bank account- except she doesn’t. She lives off her state pension and her small occupational pension from when she worked as a care assistant in a day centre for the local authority.

So now we decide we tax her and she will have to sell to release the equity. However she still needs somewhere to live, shes in her 80s but lives independently due to the fact her 2 children, 4 sets of grandchildren and also x2 great grandchildren (late teens) all live on the same large housing estate. Now there are 20 bungalows on the estate but they actually sell for more than the dormers due to demand about £155/160 and she has downstairs living in her current home so she doesn’t actually need to downsize in that respect. The other alternative is she moves to a ‘cheaper’ area to downsize which would maybe be £110-£120k for a bungalow leaving 10-20k in equity. But also in the process looses her support network and the move will probably finish her off.

Yes shes not in mansion tax territory but the principal is the same, for people who bought and have made money its not in their actual pockets and house prices have gone up so for elderly to stay in their area probably with their current support network they probably aren’t going to end up with that much cash left over anyway.

The reality is is my Nan is probably never going to see that 136,000 as she will either need it to pay for a care home , or she will pass away in her current home in which case it will be released when the house is sold at the point. But she won’t benefit from it in the way posters are making out.

The Government estimates there are 160000 non council houses worth 2 million or more to tax with the new mansion tax.
About 27 million properties in total subject to council tax.
And google thinks around 110 council houses in the entire country worth 2 million or more (0.0004 per cent)
So hardly a big story.

I think pretty lucky to be in the top 0.6% of property value and pay mansion tax. Can understand why people who paid a lot of stamp duty recently though are annoyed to be hit again.

The issue for government is more whether mansion tax will raise more than the value destruction caused by the tax and consequential loss in stamp duty revenue. I don’t see the point of taxes that raise less overall just to make a political statement. It seems to me successive governments are using taxes to point score now rather than raise revenue and that is just madness.

COVID like .... It was a pandemic

@Picklesandfrickles - £4000 in 1960 to 2026 accounting for inflation using CPI would be just shy of 120k already. So the profit she made accounting for inflation is far less in any event. And most likely over that time period she invested at least 20k in improvements anyway resulting in virtually zero profit if accounting for inflation and improvements. Which would be the right way to do things.

We wasted 9.9 billion just on PPE.

9.9 billion of tax payers money. My taxes, your husbands. The people whose earnings actually contributed to buying unusable and expired PPE.

If you think that doesn’t equate to wasteful government spending, you’re on a different planet.

Oh that. I mean they were buying it at rush weren't they in an emergency. Mistakes were bound to happen..

Well, now that money needs putting back, hence the taxation we’re talking about.

Join us for paying it, if you like.

I did notice you’ve not mentioned anything about your lack of contribution to the cost of running the country, despite having lots to say about what taxpayers should and shouldn’t pay.

Why are you angry? I have a job.

Me? I’m not angry.

You were asked a couple of times if you personally earned, as you said your husband was a high earner. You said your income was shared because you were married.

That obviously suggests you’re not personally an earner (or contributor), which would make sense if you didn’t also have lots of opinions on tax spend.

I don't dislike anybody but fairness is completely subjective. You have no idea if the person enjoying a lifetime tenancy in SH worth £2 million has less or more wealth than the person that owns their home. SH isn't means tested. 100,000 households in SH are in the top 20% of earners in this country. They will presumably have pretty nice pension pots to match in lots of cases and will have more disposable cash than most people due to lower rents they enjoy and lack of mortgage and interest they have to pay. They could easily have invested all this surplus income and have significantly more wealth than the person who has a large mortgage on a £2 million home they own privately.

The owner of the social housing is probably a Housing Association. It may well have less money to spend on social housing if it got hit with this tax at a time when the state is trying to achieve the opposite. Again, isn't it logical to sell the expensive social housing and rehouse people in cheaper houses? We should do this until everyone is housed as cheaply as efficiently as possible. Why not? Why isn't this ok but forcing people to move from their privately owned home due to the imposition of a mansion tax is totally ok? What's good for the goose is good for the gander.

It's possible, but the "person living in social housing worth 2 million who is themselves very rich because they became so after getting the lifetime tenancy" is very hypothetical. I doubt there are that many individual units of social housing worth 2 million** so the odds aren't in our favour to start with. If there was a high income tenant living in a council house over 2 million I would expect a newspaper to have done a rage baiting article about them by now. In the same way the Telegraph weren't able to find an old pensioner living in a 2 million house forced to sell because they can't afford the mansion tax. The closest they could find was the pensioner in the article who hypothesises about another hypothetical pensioner who might not be able to afford the tax.

**I thought maybe the Barbican which includes social housing but even there the fancier flats seem to cost about 1.5 million.

Also the top 20% of UK earners is anyone who earns over about 62,000. Which is a decent salary certainly not one to complain at. But it's not obscenely rich. It covers higher band nurses salaries and quite a lot of essential or traditional working class jobs. So I'm not surprised some residents in social housing earn that much. I would be surprised if their homes were worth 2 million however.

Yes. I do.

The man we’re discussing here has specifically said he can afford it, so there’s no mention of anyone needing to leave their home.

I don’t know how much either a HA tenant or the owner of a £2m property have in available funds. I can assume, but I don’t know for sure - obviously.

What I do know; is that one of them owns a property asset of £2m, and the other - doesn’t.

Fair points.

He has “had money” all his life? What, did it just fall from the sky and hit him on the head? Or did he perhaps work and earn it? Whilst also paying tax, which covers the “paid a bit more back” that you think he owes.
It IS envy and it IS ridiculous to assume anyone with a £2m house is some kind of fat cat, sat laughing on piles of unearned wealth, whilst exploiting the poor and avoiding tax. The assumption on MN that “the rich” are all like that is equally as offensive as the one that “the poor” are all feckless and workshy.

Engagement rings have outpaced inflation. Unlike a home, I don’t actually need one. I think there should be an engagement ring tax for those who have benefitted from this.

No, he, in almost all cases, worked for it and earned it. Why does that mean he should not use it to pay for his care? I genuinely don’t understand this point.

The calculator says £309k back in 1960

For some reason I can't bring myself to feel sorry for someone rattling around in a five bedroom house. That's an expensive property, even in the most run-down part of the country.

You're a delight

If he sells the house he doesn't pay the tax.

@Valpolichella It IS envy and it IS ridiculous to assume anyone with a £2m house is some kind of fat cat, sat laughing on piles of unearned wealth, whilst exploiting the poor and avoiding tax.

Anyone with a house worth £2m that paid £15k for it back in 1960 (which was a lot of money back then) is a fat cat. The inflation on that is astronomical. So, no it's not envy. People need to start looking at how lucky they've been and stop being greedy bastards wanting to keep it all for themselves.