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/

In a sense it is human nature to want to hold on to what you have got, those with money and/or power have a greater ability to hold on to what they've got. The rest of us just have to suck it up.

Don’t be such a bootlicker.

and OP yes, I can’t think of any argument why one shouldn’t pay tax on a £2m mansion. For every 90 year old there are 10000 young rich people.

I actually think it’s a clever idea because no one needs to but that property. You choose it, you pay. Totally avoidable tax.

Why "should" he pay tax on his home at the end?

redistribution of wealth

his home is onyl worth that at the expense of younger people. He didn’t earn it.

If the argument starts from why people should pay taxes, then we're in a difficult position.

However, most can agree that taxes should be paid, and that these taxes should be a fair reflection of individual wealth.

In this case, there is huge, unearned, accumulation of wealth in a rising house price that does not contribute to economic productivity. It is untaxed.

There are some dreadful people on this site.

Not really. Bank of England inflation calculator says that was equivalent to £250k today.

I mean that is a huge profit however...
If we paid say 170k for a small 3 bed semi that is now worth 400k. Its taken over 25y... And seems a good increase but still an average or below non detached house. Its just in a now more expensive area. But then 20y of cou cil tax of 1-2k+ per year. Stamp duty mortgage etc etc. It is not like we have made anywhere near 200k as just maintaining a house and did a garage, driveway etc etc.

What i mean is these are dispropoortionally affecting expensive areas but theyve paid more stamp duty, more to removate etc more mortgage. Seems unfair to consider what could be small or very small properties a mansion or for LVT if actually they are average!

However i do think a tax on CT in london where the CT is crazy low presumably due to shoos or few elderly, dont they even have fewer kids etc too there

Both.
If someone buys a ‘mansion’ (expensive home), they pay stamp duty.
When they live in it they pay Council Tax.
If they don’t live in it, they pay double council tax.
It is obscene to then tax them purely because they own an expensive home. What about people who spend their money on cars or stocks and shares instead? Why target homes? People doing the right thing!?

To on top of that try to punish someone who has simply lived in a home for 60 years, and through no fault of their own has ended up with a high value property? They are under pressure to sell or release equity so that the government can get its mitts on money before they get to tax it on death?! It’s sick.

I am not envious - why would I be envious?

I am however, not a believer that someone has an asset be it a house/home/other that they wish to leave to children etc shouldn't pay their way.

There are options - they can get a lodger, equity release, move.

want to see the issue of family trusts tackled. It’s disgraceful that IHT is really only paid by estates just about rich enough but not rich enough to have all the avoidance mechanisms of the super rich. The super rich are actually gaining more and more and more. And that drives up everything - house prices for eg. How many motherfuckers are owning 200+ properties in a housing crisis for eg. Those are the ones that need bashing. Not this guy.

This in bucket loads.. the really rich people pay nothing, so why should he. Let’s start with trust funds and work our way down.

Surely it’s the fault of successive governments failing to tackle the housing crisis, including right to buy, landlords and BTL’s that are causing a problem, more than a 90 year old living in Richmond.
Its getting to the point where you might as well not bother trying to own a home, and just not bother working at all.

Have a heart.

He’s 90.
He’s lived there all his life. To you his house is an
asset, to him it’s his home.

When we mention council housing and whether tenants should move after their children leave the house, we’re always reminded that’s this is their home and they shouldn’t be expected to move. Same when a social tenant starts having a good salary.

Why are they more deserving of their home?

People who buy cars, stocks and shares and the other examples you give do pay tax both on the purchase and on any capital gains (or with stocks and shares, the returns). Property is quite unique in requiring no tax for capital gains.

I feel quite uncomfortable about this.

it’s well known that elderly people can deteriorate very fast after moving house (because if they’ve lived somewhere for a long time they remember where everything is and how to use it, but learning new ovens and microwaves and showers css as n become very difficult).

equity release has had twenty years of newspapers and media generally warning about it as people can and have lost their homes while still alive.

in general I’m in favour of a property tax but I do feel sorry for him.

You do understand Christianity is giving a fuck about other people?

Explain. We’re talking about wealth here.
People with a portfolio of investments in shares pay tax on the dividends they earn, not the value of the portfolio. The portfolio value is only taxed when shares are traded/sold.
Why should a home be any different? He’s not selling his home.

It is a slippery slope though.

How about any homeowner who has their name on any kind of house deed immediately has to pay a one off charge of £500 to the govt. And if you don’t have the liquid cash, the govt could compel your lender to just add the 500 to your mortgage balance. And it’s per person so if you and your spouse own a home, you each pay. That would be the “most able” people in society paying. Nobody in a council home would need to pay, renters wouldn’t need to pay. Students wouldn’t need to pay. So it could be argued as “fair” and necessary. And however many deeds your name appears on, you need to pay multiple loads of the £500. And it needs to be today. So the govt can have a multi billion pound immediate financial bonus.

Very slippery slope.

How about any adult passing through border control pays a £50 per person every time they go in and out of the country. You can afford the trip, so you can afford to pay this levy. It’s £50 per entry or exit.

Where will we stop

Or, when will we wise up and realise that taxing the shit out of the guy next to you who you think is richer than you isn’t the solution. And perhaps tackling the insanely wealthy people who have compounding wealth and are draining us.

It does seem quite likely that the state will get at least £400,000 in IHT from it in the near future. That’s seems a good chunk.

I am not against the tax as such. But it does need to take into account all factors.

If a typical family home is £100K in an area, then a £2m home is going to be out of the ordinary for that area.

In parts of London, not so much, I would assume it's more in the higher end of normal for a decent sized family home. Not necessarily the "mansion" implied.

So you think he should not pay tax that everyone else in his road has to pay, because he is old?

Take in a lodger?
Equity Release?
Move? (appreciate its his home)
Sell off part of his garden (sometimes this is possible)

Why is his age a factor ?

As you say - they pay tax on the dividends and tax when the portfolio is sold. Property, however, is unique in that it is not taxed when sold, even if it has appreciated in value.

He’s paying the tax that everyone else in his street is paying! 🤷‍♀️

Yep, my mum
moved aged 82 having been completely self-sufficient in the house she had lived in for decades.

she could still use her washing machine in the flat she lthen lived in, because she’d brought it with her. She could not operate the new washing machine or her new tv when the old one broke

if she left the flat and it’s grounds, she got lost. She couldn’t fathom new bus or train routes she had basically been operating on brain ‘muscle memory’. Her brain wasn’t plastic enough to learn anything new

she had to go into a home and died fairly quickly.

He IS entitled to it in its entirety. Not sure what planet you live on but he bought and paid for that house and it belongs to him not the government or anyone else. It’s not a community asset.