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 don’t need to Google it. Unlike you apparently I’ve worked with council housing departments and housing associations. I know how the finance works. Social housing rents cover the cost of repaying borrowed money in exactly the same way that a mortgage does. By your logic someone on a fixed term mortgage with an interest rate lower than the current one is being subsidised. It’s complete nonsense.

Have you? I have too. It’s subsided. If it’s not what is the £39bn that Homes England is currently allocating? It is subsidised, as it should be.

i live in Richmond. I live in my childhood home which my parents bought for £18k in the 70s. I cared for my parents before they died (including being main carer through 5 years of dementia) and after they died, we sold our flat and spend the money making this house fit for me, DH DC to live in and paying the substantial inheritance tax. It’s a modest 4 bed semi and worth about £1.7m now.

I could have sold it and moved up North so someone rich could by my house , but I was so emotionally attached to my home, grieving for my parents and an only child so I decided that I really wanted to live in it.

if I had been raised in a small village up North, that would be fine - sweet, even. But because it’s Richmond, I deserve everything I get.

We have a very modest income, haven’t had a holiday for 8 years and no, we can’t afford £2.5k mansion tax.

The assumptions on this thread are so ignorant.

I could have sold and moved

No, it doesn't when it's a grant or a highly subsidised loan.

Look we've been through this before. Funding through the Social and Affordable Homes Programme and ridiculously low cost loan facilities (0.1%) is not comparable to an individual getting a lower mortgage rate. The fact that you made that analogy makes me think you have never worked in the sector as you would know this.

I really don’t care if you believe me or not. And the analogy is entirely valid. You can carry on believing what you like, it doesn’t make you right.

"current or former"
So that could easily include council houses bought very cheap under right to buy in the 80s, renovated and then sold for millions as the owners move away. I can believe that could happen in a few cases. Mind, the people who profitted from that would be the same people saying they have worked all their lives and shouldn't have to pay inheritance tax/additional taxes on the properties/assets they now own.

The other possibility, if they are being sold, is that those are houses/flat the council has taken back, and sold presumably after moving the former residents into new, cheaper housing. There was a very famous block of flats this happened in. It was designed for social housing by a famous designed but years later the council built new homes for the residents and were able to sell their old flats for a lot. This generating savings. I don't know if it was over a million in that case. But the irony is, that situation (people being moved from the expensive housing) is presumably what you want to happen. But it still makes you cros...

Yes all of these things are possible. Equally it's more possible that some of these houses have remained SH unless you genuinely think every single one has been sold on. Also Reeves explicitly stated that SH is exempt from the tax. Why would she do this if it wasn't relevant?

What is the "get" you think people are saying you "deserve" though? I am sure your house is lovely, but while expensive it's well below the mansion tax so you are angry about being made to pay a tax you don't have to pay. Even if you did fall into the bracket you could, if you couldn't afford the tax, choose to defer paying until some point in the future when you decided to move and sold the house. Which you don't want to do anyway because you love the house so much.
No-one is being dragged away to the Gulag.

Ok then... Your analogy comparing a private mortgage to a state grant is fabulous. You are obviously right. I am going to ask the state whether they will let me buy my next property with a public grant instead of a mortgage. Afterall they are absolutely completely the same thing.

Because were all just normal people, with normal working class jobs who don’t have money floating around on top of our own bills. You know like bills, childcare, mortgages …

I didn’t say they were the same thing. If you’re going to be facetious at least try to use the material accurately.

And well done that man for making sensible life choices, working hard, serving our country, and being lucky enough to have the dice’s roll his way. Let him live out his twilight years in peace.

how do we raise more tax? How about we cut the demand on raising tax? Get more into work, reset expectations of what a good standard of living is (eg cull this crazy idea that everyone is entitled to a substantial sized house, family, next day delivered tech gadgets, etc on the minimum wage…. Just think about that for a second. People now expect the lowest paid job to provide luxuries people working in well paid jobs could only have dreamed of a few years back), stop the government interfering in citizens day to day lives more than they have to by treating them as adults, tax everyone equally at same fixed rate to make work pay. I don’t think it’s that difficult…

I think you’re misunderstanding equality given how you’re using it.

you’re essentially advocating for redistribution of wealth because…. “It’s not fair that X has more than me”. That’s a similar line to what toddlers would use in the playground.

Making the nhs more efficient would be a good start. Have you used it recently? Have you seen how you’d struggle to create a more inefficient system if you’d tried?

Tax everyone at the same rate?

No. My work pays enough to mean I pay more tax, but still quite obviously “pays” beyond that in the sense you mean.

I can also see you think the NHS can be made better without any money going into it, and that the government “interfere” by taking tax that is owed to them.

Life isn’t free. Services aren’t free. Some of us have more and therefore contribute more towards the services that we all need. Thats unfortunately just how the cookie crumbles, but it still absolutely means that the better off remain better off.

You’re missing the point. Why do we need more tax? We’re one of the heavily taxed societies there is.

why can we cut tax burden? Why can’t we have a smaller government and a more self sufficient society? Why do so many people need hand holding to provide for their own basic needs? It’s ridiculous.

I'd love to see a "tiny Victorian terrace" in any part of London going for £2m. For reference, a "two up, two down" terraced house is usually around 700 sq ft unless it's been significantly extended (in which case it's no longer "tiny").

Even in somewhere like Mayfair or Belgravia, if you're paying £2m then it'll be at least 1,000 sq ft.

I'll just wait for a poster to pop up and tell us all that the people of Mayfair and Belgravia are salt-of-the-earth, hardworking retired lamplighters and chimney sweeps.

I have Googled it. It was unequivocal: Existing Stock is not subsidised by the taxpayer.

If a council house is worth £2m today it must have been built a long time ago. Possibly the 1930s when there was a concerted effort to expand living space for the working class after WWI brought the squalid conditions in Victorian slums to the attention of the government. The capital will long-since have been amortised.

👏

Yet the NHS is one of the cheapest systems in the OECD. If you want to create an inefficient system, just look stateside where the hospitals and insurers argue over claims.

Why do we need more tax?
Because we have an ageing population (which means that there are more dependant pensioners than working young people to support them) and a housing crisis (so we need to incentivise people to downsize where possible).

We’re one of the heavily taxed societies there is.
We really aren't. The total tax burden in the UK is 35.3%. There are 14 European countries with higher tax burdens than that, topped by Denmark at 46.9%.

If you want to argue for specific issues like Stamp Duty (which is too high at the moment, perversely incentivising people to rattle around in big homes rather than downsize), or sorting out the 60p marginal rate then I'm all ears. That doesn't mean that our taxes are high overall.

define “his share” please? As it stands, it just seems to be “more” as “he can”.

why can’t his share be the same as everyone else‘s? Why must “his share” be more?

we need to get to the place where we’re all taxed equally. We all live in the same society after all. Have never walked into a pub in my life and had the price of my round depend on how much I earn…

So your house is worth more than mine but my salary is more than yours… I suspect I’m paying more tax than you based on income but clearly you’re wealthier. You should pay more. Please start pouring more. Come on. You must be able to as your house is worth more than mine. Pay “your share”.

i bet you come back with drivel about how you’ve paid “your share” thus completely missing the point

So homes are just assets in your eyes? Try explaining that to the supporters of the rental reforms….

I’ve said it before on here but we should copy the Australians - CGT on all assets transferred in death. 24% so much lower then IHT rates and you can deduct the cost because the asset was bought with after tax money.