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/

Perhaps I do.

But tax, doesn’t care about our disposable income.

It doesn’t care if you have 1 kid or 7, if you shop in Aldi or Waitrose, if you have teens or a whopping childcare bill.

If it’s a tax set and therefore owed, your remaining funds afterward don’t come into it.

I assume that would be the case in this instance.

Why?

I think the regional disparities are awful - as shown in the differences between numbers of people who own vs rent, the unfairness of standardised stamp duty and so on. Some have theoretically gained because the home they live in has increased ten fold in value but they live in a cheaper region, plus have had the additional benefit of lower stamp duty for the space, fewer years renting, lower mortgage costs as could maybe buy a two bed or a house without going from a one bed first. If regional differences aren’t considered, perhaps it’s time to tax space instead of cost per sq ft.

The more you write the more self righteous and smug you sound.

Your anger really seems to be aimed at a wider issue not an elderly man you don’t know.

I’d be interested to know your particular circumstances as you seem to be happy to shout about the circumstances of others. You sound rather jealous and angry if I’m honest.

Would you be happy to pay income tax on the same income twice? Or is it because it doesn’t affect you that it is ok?

But regional variations, and rapidly inflating house prices will just keep getting worse as long as houses in some parts of the country are an incredibly profitable investment instead of primarily a shelter. It's a ponzi scheme that hurts would be home buyers and renters

A mansion tax on its own won't fix that. But unless we rethink what houses should be for it will keep getting worse. You could fix it in a number of ways, but all of those would be resisted by people in expensive homes because, even if they say they are only there because it's the area they grew up in etc (probably true) they wouldn't want the value of that home to fall or anything that affects it's value as an investment. Hence the anger at the mansion tax.

If the new tax comes in then there will always be some winners and losers.

People do pay an annual property tax per year: it’s called council tax.

Yes, but it's currently an unfair mess. The comparative values of homes for council tax is fixed at 1991 levels and since then homes have increased in value but not evenly- homes in the North of England have increased in value by about 3 times while homes in London have increased in value by 8 times. Homes in the most expensive parts of London have increased even more. And this isn't reflected in the tax bands (set at 1991 levels) so someone on a low income in a low value house could be paying more tax than a super wealthy Chinese, Russian etc owner of a place in London they leave empty. (So even though the house is very expensive, the council tax is negligible in contrast.) That's if they pay it at all, which until recently they might not have done. https://www.counciltaxadvisors.co.uk/council-tax-empty-property-premiums-exemptions-2026/

Reworking council taxes, or moving to a better system altogether would help with this. In the meantime the "Mansion tax" is an attempt to rectify this for the most expensive houses in areas which even those against the Mansion tax agree have gone up in value disproportionately.

I know there are a few people who aren't super rich who live in those houses. But they are a minority and likely have been paying less council tax for years than someone in an equiv value house somewhere else. It needs to be rebalanced somehow. (And noone who can't afford it will need to pay it, they can defer and it's taken of when the house is sold). If there's a better way of fixing the system then feel free to share!

We all pay tax on the same money time after time. Every time we fill our cars, every time we buy an item that incurs VAT, council tax is paid from taxed money. The mansion tax or whatever it might be called is no different. I honestly don’t understand the hostility to paying tax. It’s as if it’s some kind of personal insult.

In any case we’re not discussing paying income tax twice.

This is simply untrue. We bought our house as our forever home with a plan to stay here very long term. Rises and falls in the housing market are NOT the issue with the mansion tax, for me at least. My issue is, I’ve paid the huge amount of tax required, simply for the privilege of being able to buy my home.
But now so many people seem to feel entitled to say….well, if you can afford that, we want more of your money? Why do they feel entitled to it? Why do they feel entitled to say to a stranger, whom they do not know, I want your cash, simply because they perceive I have more than they do? Do they know what it took to earn it? Do they want to take some of the risk, throw some of their money in and take the risk of losing it? No they don’t.

As someone who did not grow up with any kind of privilege, who has been given nothing, who has worked for every single thing I own, and who already pays vast sums of tax, it is an attitude I do not understand.
I wholeheartedly agree that the most vulnerable in society need and absolutely deserve support, but I’m already doing that, via high taxes and a whole host of other measures. The inefficiency in how that money is spent is another issue.
I have been on the bones of my arse, utterly, utterly skint and never once did I look at someone with “more” and think…..they should give what they have to me.

Ok but also

Rubbish collection
Drains
Road repair (the dreaded potholes)
Police patrols
Security apparatupark.maintenance
Playground maintenance
Schools
Hospitals
Bridge repair
Electricity grid
Bank bailout to stop everything collapsing in 2008
Etc etc etc

Are all things that benefit you. In addition to you benefitting directly from stuff like not having rubbish pile up on the street, it also benefits your house prices. You talk about the government "taking" or other people being grabby with your money but you have also benefitted from your taxes being spent. It hasnt all gone to useless unemployed people. In fact, as a property owner, in some ways you benefit the most from the whole system not collapsing. I think the government wastes money sometimes and feel cross about it. But I'm not so naive as to think I have only ever given and never benefitted, even though I've never claimed actual benefits in my life.

Your bias is showing. Everyone benefits from taxes being spent, whether you own a house or not, whether you pay tax or not. The simple fact is I already pay far more tax than most and I am questioning the legitimacy of paying even more.
Do I somehow have extra rubbish collection, better drainage, better NHS service, better roads? I do not, nor do I expect to. And I have never once referred to “useless employed people”. This is your terminology, not mine.

Everyone benefits exactly!!! It's not money that's being taken away from you by a thieving government.
I don't know what bias you are talking about? I own a home (or rather I am slowly paying back a massive mortgage on a home) and pay a lot in taxes also. I do not like paying taxes, however I also don't think I am being stolen from when I pay them.
I can also recognise, having struggled to get on the property ladder, the issues that constantly increasing house prices have. In particular parts of London will empty out if young families can no longer buy or rent homes there (in the way that the gentleman in the article was able to do so in the 60s). I'm a millennial, but it's even harder for generation Z and even if they work just as hard as you, or me, or the old man in the article did, it will be much harder for them to achieve home security because of the rise in property prices.
In addition, taxes may need to increase because we will need to spend more on our military and an aging population. Putting the tax burden solely on income tax reduces productivity and penalises the younger generations who need to save to get on the housing ladder but are hit with a double whammy of high property prices and more of their income going on tax. Younger low earners can't afford to rent or buy. Younger high earners are forced to shoulder the tax burden. Higher property values also discourage alternative investment in businesses/stocks/shares which further lowers productivity.
There are other ways to raise tax than income alone. And a land value tax (not council tax which as said before is not based on the values of homes) would be a fairer way of doing it. It might also have some positive side effects of discouraging land as an investment and slowing house price inflation. You can disagree with it. But you can't paint it as politics of envy/some radical left wing position. Even Milton Friend man wanted land tax and he was not a socialist fire brand. The mansion tax isn't a land value tax, but it goes a small way towards making the system better.

If you don't like the thought that home/property owners benefit more from public services, maybe a better way of thinking about it is that they have more to lose if it all stopped tomorrow?

That is just so funny, there is such a low number of net contributors in this country.

For what it’s worth, I have no issue paying tax, we need an effective society. That is not what the U.K. has.

It's weird though because everyone on Mumsnet is a net contributer so you'd think statistically it wouldn't be a problem. It's a conundrum

Richmond has always been that sort of multiple more than the national average. It was the same in 1998 when we bought.

Really??? I mean really? This is so simplistic.

If it all stopped tomorrow, the wealthy would be fine. In fact if it stopped tomorrow I would be a lot better off 🤣🤣🤣🤣🤣.

🤣🤣🤣🤣🤣, and yet a lot of threads refer to universal credit.

@Valpolichella , you are being incredibly reasonable, but you cannot reason with these sorts of people. Just wish them the best and hope they are ok!

Maybe several years of residency for tax purposes should be required before new purchases are required.

I like the new NYC pied-a-terre tax. It targets those who want the benefit of a Manhattan penthouse, while dodging the New York State taxes by spending six months of the year in Florida.

The super wealthy would be fine they always are. But if (like me) you have most of your savings in a house and a lot of debt in said house then nope, a complete collapse of the economy would wipe me out. And my house value (and the economy) wouldn't survive if the government just stopped paying for everything they currently pay for, trust me. I have spent time in South Africa where government corruption and people not paying taxes hollows out the state and you can see what happens to previously nice properties. Or even the situation in parts of. south America when the economy goes to shit. I know that "everything stops" is overly apocalyptic/dramatic. There is no chance of all government spending stopping. But I have enough life experience to know that people like you and me who have worked to buy property would lose out a lot of the lights went out. Hence we benefit from the lights staying on. Hence tax.

But it is only worth £2m if it is sold and someone pays that.

I’d quite like to test that as your house no longer had running water or sewage disposal, the road outside crumbled, children roamed the streets because there were no schools. You wouldn’t get treated if you needed A&E. If you were inevitably burgled in the chaos there would be no police to attend or prisons on the off chance the offender was somehow apprehended by some unknown entity.

It all sounds positively utopian.