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/

@DdraigGoch - would you call this house a mansion? This is Barnes SW13 - not even Chelsea, Kensington etc.

I don't see why you feel entitled to his money, OP? Presumably just because he has it.

The Treasury can fuck off. They'll just redistribute it to grifters.

I think you are being deliberately disingenuous.

If the state buys me a house or pays to build my house and I then pay enough roughly to cover the running costs then am I being subsidised? Obviously yes! Anyone with a mortgage or who pays private rents knows this. Your statement regarding existing council stock neatly side steps all this when it's at the heart of the issue. If it wasn't then SH would be far more scalable and we wouldn't be pumping tens of billions of pounds into it over the next ten years.

SH built in the 1930s was built with a combination of national taxes, local taxes and loans. The loans were largely paid off through the rents paid but the build costs were still subsidised by the tax payer. More importantly, capital being amortised does not mean that tenants aren't being subsidised by the state to live in expensive accommodation.

If I owned a £2million property without a mortgage then I could sell up and earn £100,000 each year by putting this money in the bank. No risk and no expensive legislation to manage. If I let you live in my house and you offered to cover the running costs then would I be subsidising you? Obviously yes. This is true for SH too. There is an opportunity cost associated with tying up so much money in expensive SH stock. The council could use the £100,000 a year interest to house multiple families or invest the original £2 million into different housing stock.

The 'get' is that anyone who lives in a house worth over 2million can 'easily afford'.... No, they can't. I am close enough to threshold to know people - neighbours - who definitely can't. Our houses are average and it doesn't take much - a couple of streets nearer to the park for example - to bump 'my' house up to the threshold.

And yes, there are people who think we deserve to pay more tax becuase we live somewhere 'desirable'.

But parks cost a lot of money to maintain. They could also (I know that this isn't legal) be sold by the council for millions and millions. If you think of how much the houses cost imagine what Richmond parks land is worth. Excellent primary schools/transport links/roads not covered in litter are down to govt. spending as well. Of course everyone benefits from those sorts of public good. But in addition to the public good it, as you said, drives up the value of the houses near them. Richmond has always been nice but other parts of London eg Kings Cross have seen house prices shoot up due to council work on rejuvenation.

You seem to see the price of your house having gone up/living in a nice area as being a type of punishment because it potentially pushes you into the mansion tax. "A few streets closer to the park". But it does also mean if you sell, or if your children sell, you have a lot of money. Some of this money is due to council spending it's money on things like the park and it doesn't fall equally. Everyone benefits from beautiful parks etc but the people closer to the park get more of a financial advantage from the council spending on this.

I guess I don't see why, when finances are tight, it's such a terrible thing for people who have disproportionately benefitted from big council/government spending to pay a tiny amoint of that benefit back. Its possible to defer paying the mansion tax if you can't afford it until moving. So your very cash poor neighbours who can't afford 2,000 a year can wait until they sell their houses for 2 million (that they bought for a tiny amount of that) and give less than 1% of it's value in tax at that point.

I don't see how people thinking it's ok is so persecutory or hateful. If your neighbours by the park decide to sell, they have already won the lottery mansion tax or no. If the council/police decided it couldn't decide to feed the deer, patrol the park for criminal activity/stop illegal fly tipping. Then they would lose much more money if they sold. People always thing the government/council don't do anything for them. But if you live in an expensive part of London the government has indirectly helped you a lot.

👏

Unearned... Unearned...people buy their houses don't they?

At £15k…no one is entitled to an exponential rise in that value without contributing tax on that gain

No, he wasn’t ‘entitled’. It just happened.
And it will be taxed ON HIS DEATH.

Your grabbiness is very ugly.

Accounting for inflation, it is just over 250 k today.

That is 15 k then is the equivalent to 250k today.

He has benefited from the property price rises, not necessarily rich, he bought a home in an area that became very very expensive.

The blanket tax at this level is purely a tax of envy. Like VAT on school fees, it’s not going to affect the proper wealthy.

If one considers a very hard working City lawyer - working 80-100 hours a week, not yet made partner, or in house, say on 250/ 300 k Paying tax via PAYE, using health and dental insurance, if one child perhaps prep school. Bought a flat in Hackney as able to walk into City (so got a little more sleep), cashed out when got married and moved to Wanstead….in a two million quid house with a part interest/ part repayment mortgage. Like how much more do these people have to pay??? Taxed at every turn - and yes I do believe in society and paying tax.

People cry out look at Sweden/Finland etc., yip one pays higher tax and can still benefit from the child care/ education etc.

50k is not a high earner - there is no one left to tax.

one of the big issues is that there are not enough people that are a net contributor to the country, as we are high tax low income. We should have benefits, as a safety net, not a way of live for many. And the international health service - that is a whole other thread.

Why? Why is anyone else entitled to the proceeds of his house appreciation? His home.

Is “one” supposed to feel sorry for the guy you describe in your post?

Everything you described is a choice. Unless he’s been strong armed into paying for private health and education, and forced to buy a £2m house?

It's what a large % of MN are like

It is. Because people tend to want fairness and that means someone sitting on an eye watering, unearned capital gain paying a modicum of tax on it.

Well, to be somewhat controversial why do people feel sorry for those who have chosen to have children that they can’t afford? Obviously, for some, circumstances change and people need support. And yes, I totally agree that is for the benefit of the children involved who have no choice in any of it.
But, for the man in question here, circumstances changed? He bought a house which has risen hugely in value. I very much doubt when he bought it he expected such exponential growth. And he’s now going to be asked to pay a tax that he hasn’t budgeted for or expected. That’s circumstances, he isn’t in control of that.
So one set of “circumstances” is to be supported, but the other isn’t?

What's fair about it? The house is his..not yours..not anyone else's

Which he will when he dies? He paid tax to buy it, tax to earn the money to pay the mortgage, tax on any money he spent on its refurbishment or upkeep. He has already been taxed and the capital gain will be taxed on his death. Or used to pay for his care. And yet still, people want more?

If he needs social care, he will have to pay for it.
Then when he dies, he will pay a huge amount of tax on his estate.,
Why should he pay extra when he is alive?
How about everyone up North paying extra to the South, for having all that extra funding per head and being able to afford to buy a house on minimum wage?
Why should we be starved of every penny, just because of our postcodes?

So if no-one is entitled to it why do you feel others are entitled to part of it?! Your approach has others that have done even less than you claim this man to have done having more entitlement to his money than him! If

Your logic makes no sense.

In the same way being feckless and lazy and scrounging of others is a choice….

I’ll bite. I’m tired of people insisting on wealth taxes at what are really quite low thresholds. As others have said, in London / the South East £2million buys a standard 4 bed family home. And I don’t live in the area, so I’ve no vested interest.

Likewise, higher rate and additional tax rate thresholds have been frozen for years whilst wages stagnate. £50,000 is no longer a “high wage” with. the current cost of living.

Meanwhile, lower rate taxpayers make some of the lowest contributions in Europe.

Note how income tax thresholds have been frozen - the same will happen with wealth / property taxes until the equivalent of a £500,000 home is within scope.

Why are we not instead directing our ire towards large corporations that sidestep tax like Amazon and Starbucks? Because they’re faceless corporations, whereas it’s easy to hatefully envy an individual who’s better off than us but nowhere near a level of “elite wealth”.

The gain on property is taxed under inheritance tax, so the gain is recovered by HMRC, for those harping on about “fairness”.

In reality, what is fair about redistributing the income of hard workers to those who don’t work? People who insist on this imagine a “deserving poor” in need of others’ income tax receipts.

I went to private school, pursued a career over the course of 10 years, and in the last 5 years became a higher rate taxpayer in my 30s. Others I went to private school with have dossed about, ultimately chosen not to work, and claim various benefits as an reult of being low / no income - including one who lives in a council house. Should those people receive the benefit of my income tax receipts, despite having had the same educational opportunities I’ve had? I don’t think so.

We need to insist on people working and supporting themselves wherever they are able to do so, and save benefits for the most in need ie terminal illnesses, severe disabilities, time limited access for incidents like a broken limb that prevents return to work.

Oh, and the triple lock needs to be scrapped too. That forms part of our ballooning benefits bill and is only set to get worse.

That’s not controversial, it’s a fairly common view.

I don’t feel sorry for people who have multiple children they know that they can’t afford, can’t be arsed to work, or game the system.

I do feel sorry for people who work full time and still can’t make ends meet. For people who either are disabled or have disabled children. For people who wouldn’t be able to survive if their deductions went up, because they’re already struggling. And yes, for the children of the people who just can’t be arsed working.

Those people unfortunately do need propping up, and I wholeheartedly believe that it’s people who can afford that who should be doing so.

I think if you’ve got the means to pay more, and you’re not going to struggle without it, not being willing to is just greed and spite.

I know certain posters here think all taxation is unfair to the point of labelling it “punishment” or “robbery”. Quite a lot of us disagree.

I so agree with this. This man who bought the house, with his own, already taxed money isn’t “entitled” to the gain, but other people, who have literally nothing to do with him or his house, who have paid nothing towards it, are??? Zero logic.