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/

Am I angry or are you just rude? And yes, I will have to pay it, after having paid mid six figures in stamp duty in the last 12 months, from already higher rate taxed income. So it does affect me. Not everyone who has to pay this bought a house for £15k 60 years ago. Some of us have inherited nothing, have earned all of it and have already paid vast amounts of tax.

Well, that’s the point, isn’t it. A GOOD job, that just takes you into the higher tax bracket - teaching, nursing, high street accountant or solicitor etc - may ‘only’ pay £50-55k. Double that for a couple, and x by 4, and even with a 10% deposit they can only afford to buy something in the region of £400-450k. So, in basic terms, many in Labour could deem anyone owning a property over £500k to be ‘rich’, especially in the Midlands or the North. The line between ‘wealthy’ and ‘rich’ blurs when there’s tax revenue generating potential.

I hear ya!

The personal allowance taper, still at 100 k since 2010. That 100k in real terms is now £159k.

I think what a lot of people don’t appreciate to earn these sums oftentimes you give up a huge proportion of your life, the stress, outsourcing a lot of personal admin, potential burnout….

I am happy to pay tax, we live in a society and it’s needed. But, when literally public services are dismal and yes I understand they are dismal for everyone, but I am not using the NHS/ education system/ would not be entitled to childcare hours.

yes I understand policing/ rule of law….but I think that is another thread initself.

I think if people make sensible decisions to invest in property that is their choice. They already paid SDLT on the purchase. No more tax should be paid. I don't agree with punishing people for making sensible choices. Others who slurge their money in their lifetime won't be expected to pay high taxes. I don't think it's fair to take money from 1 person to give it to another person.

Agree with you, 50 k is far from rich, about as far as 100 k is from being wealthy.

This country is a joke.

Totally agree.

That’s what I said.

Proportionally people on low incomes pay more of those incomes on taxes like VAT, insurance tax, council tax, and the myriad of other regressive taxes that fall outside income tax.

It's fun watching the lives of the wealthy in Eastenders. Imagine what Dot Cotton's house must be worth.

Sorry, but I genuinely don’t believe that. My DH pays 50% of his income on taxes (income, council taxes, stamp duty which was recently nearly 6 figures) before all the other taxes you mention. We have paid VAT on two cars, holidays, legal/conveyancing fees, builders/trades persons, dog walkers, goods, furniture etc, because we have more disposable income and thus put more back into the the economy where VAT is chargeable. You mention insurance [not VATable or subj to tax, though]: our premiums are substantially higher than those on lower incomes due to the higher rebuild costs of our homes and the higher compensation required for the contents; same for the cars because they are £50-70k cars. We pay two lots of council tax (in total about £10k pa due to the second property premium) etc.

NB not complaining, it is what it is and we are privileged to be in the position we are due to DH’s choice of profession and his willingness to work pretty much every waking hour to support our lives.

2,100 sq ft? That's massive inside! Certainly a long way from (three times the size of) the "tiny Victorian terrace" someone claimed would cost £2m, even if it's not Highclere Castle.

£15k was a lot of money for a house in 1968. The average house was worth about £4k.

If you've got a bigger property (as in the footprint rather than how many floors), then you will be using more public services than a smaller house (or even better an apartment). The more dense a population, the more efficient it is to serve them.

He has benefited from property price rises, and yes he is rich. He is rich because property price rises mean he is worth at least £15 million, or does that not count as rich?!

possibly even less, my quick google says £3k was average 60 years ago, so his house was worth 5x average
average today is around £270k, x 5 is £1.35m
so today's £15m gaff would be a £1.35m place in 1960
Ok, stretching it a bit because lots of other factors/variables have changed since then... but £15million is still a lot of house!

Well by that reasoning a lot of the central London flats that fall within the tax should be carved out….given the small footprint, that is correct based on your reasoning?

Where have you got £15m from??

OK apologies I misread as it’s relevant to the point I was making.

of course it’s going to be a higher proportion of their income as relatively fixed costs will take up a proportion.

that’s irrelevant though and doesn’t change that the top 10% pay a disproportionally large amount of the tax revenue.

the UK is known as being a low tax regime for lower earners and burdensomely high tax regime for higher earners. Features such as the £100 childcare cliff edge and loss of personal allowance which create a marginal tax rate off >60% at this point are unique and known to be counter productive.

it also doesn’t make sense on a local level. In no scenario would someone paying more than half the bill be so heavily critiqued and pursued to pay more yet that’s exactly what we do in this country.

the sense of entitlement many have towards other peoples money is unreal.

that’s irrelevant though and doesn’t change that the top 10% pay a disproportionally large amount of the tax revenue.

It’s not irrelevant. The lowest paid pay a disproportionate amount of their incomes in tax. Obviously the most highly paid pay the largest amount of income tax, that’s the entire premise on which it’s based. The childcare argument is such a red herring, it affects a tiny proportion of people for a relatively short period of time.

@Valpolichella if you’ve paid ‘mid 6 figures’ in stamp duty in the last 12 months, you must be absolutely caked in money, mid 6 figures would be somewhere more than £300k in my book.

what did you buy? Downton Abbey?

But it changes behaviour for longer with negative impacts for the government. Many people go to the equivalent of 3 or 4 days per week as they start to get close to the £100k threshold, particularly if they can’t compensate by paying extra into a pension (e.g doctors).

Childcare is the trigger, but in a stressful job, time
off can be more valuable than heavily taxed additional money so once people have taken the career hit of working reduced hours, they often don’t go back full time.

There’s a misconception that small flats in London are worth £2m

incorrect! £2m buys you a lot of house. Even in London

pay up! Pay up pay up rich buggers

This is what £2m gets you in Richmond

https://www.rightmove.co.uk/properties/88548618

4 bedrooms and 1800 sq ft

ahhh just a little old man’s house 🙄

And that’s their choice. If people want to destroy their careers good luck to them. The fact remains that the childcare argument applies legitimately to a relatively very small number of people for a limited period of time. I’d be interested to see the figures for the impact it has on the Treasury.

Eh, small flats in London are worth 2m 🤣……

It is not just that you lose the childcarer entitlement though is it. It is the fact that you often pay even more and subsidise those who do get it. Like with your taxes. So it changes the equation and future planning entirely. Instead of a professional couple eg staying in London and having 3 kids and buying a house on a huge mortgage initially, they can’t now. They may only have 1 or max 2 kids, they may move abroad, they may go elsewhere. Then those 2 professionals who were going to likely be top 5% taxpayers for 40 years translate to a huge loss to the treasury. And typically their kids were going to be taxpayers too etc.
If childcare is subsidised, subside it fully and make it universal for all. Not punishing a select few who the taxpayer pot actually relies on en masse.