Do people support mansion tax?

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I just read an article suggesting an annual tax of 1% on homes over 2million.

It doesn't look too bad at a tiny 1%, but it comes out as 20 grand a year. Just to live in your house, before council tax and bills? And that's if it's a 2 million house. If it's 3 million, it's 30 grand a year

I mean my own house is not "even" worth a single million so I'm nowhere near any sort of mansion tax.

But that does seem a gigantic amount of money to have to shell out for absolutely nothing just to exist in your house.

Starmer's own home is said to be worth about £2million.

From independent:

Mansion tax
A mansion tax is popular among many Labour MPs and was a party policy under former leader Ed Miliband.
Reeves previously ruled out a mansion tax as shadow chancellor.
But there are now rumours that an effective mansion tax could be introduced by charging council tax on the sale of homes above £1.5m or even charging a 1 per cent annual levy on properties worth above £2m.
Just over 150,000 properties in England and Wales would fall into the £2m bracket today, according to Knight Frank calculations, mainly around London.

I think it's a little unfair on some - my friend lives in Wokingham borough, which is one of the lowest funded by government councils. She lives in the smallest house in the road but because it is detached she pays more council tax than 4 semi properties (all massively extended) and the same as 4 other detached ones. Given they're retired, and don't want to downsize (kids still live at home plus elderly parents nearby), they're on limited income now.
If the same house were up north, where her brother lives, her council tax would be a lot less because the property would be worth less than half as much.

Yes

Also, is it paid on house value or equity? How. Can you tax something if the person dues t actually own it, and if it is only equity why would you pay off a mortgage?

If you have a mortgage, you do own it though don’t you? The bank just has a charge on it?

No. Wealth taxes are extremely ineffective in general, and a tax on something as nebulous as the value of your house is likely to cost more to administer than it brings in. It will also have all sorts of knock-on effects on the housing market which are very hard to anticipate.

So many problems with this

First of all we don’t have up to date records of what houses are worth. The last round of public valuations was done decades ago. Even ones that have been sold fairly recently could have increased or decreased in value since with renovations, changes to the area etc.

Secondly many people living in valuable properties are not cash rich, especially if they bought years ago before the increases. They simply wouldn’t be able to afford an annual % payment.

Thirdly it’s a cliff edge. Why is someone paying £20k in a £2m house but nothing in a £1.999 million house? Will create a lot of weirdness in house prices.

Fourthly - and this is the main one - someone’s house value really isn’t reflective of their overall wealth. You could have someone mortgaged to the eyeballs with 5 kids in a £2m house and then someone in a £1.5m house mortgage free with other properties and a huge investment portfolio.

If I was going to tax property I’d start by removing the CGT exemption for principal private residence. I’d bring it in gradually so people sitting on large gains are encouraged to sell sooner rather than later.

I think it’s 1% over the threshold, not 1% of the value.

But - I still think it’s a bit random, given a £2m house in many parts of London (Starmers house included) could be a terraced house which would be £300-509k elsewhere.

A London penalty.

Yes it's not a mansion tax at all but a south east tax, the reason you have normal houses worth £2 million is because of the housing crisis in this country,

Nope. Getting on the bottom rung of the housing ladder is hard enough - making it almost impossible to sell houses at the top (which this tax will do) is going to screw it all up even more. Or at the very least, separate the very wealthy (who could buy mansion AND afford the tax) even further from everyone else than they already are. Fucking Labour, what a shower of shite.

As pp said, the levy would be on the value above the threshold.

I am on the fence. I think perhaps it would be fairer to expand council tax bands. People who are asset rich but cash and income poor would be protected as they could claim for help with council tax. Perhaps also gradually introduce CGT on proceeds of sale as minipie suggests. Perhaps on profits over a certain amount.

No, but I do support a review of Council Tax as part of the planning consent procedure, so extended properties are correctly assessed at the time of improvement.

Its not always that simple as different council charge different amounts for the respective bandings. I was actually discussing this with my dad earlier this week. We both live in the north, 10 miles away from one another but in two different councils. He lives in a 3 bed semi which is a band C, I live in a 5 bed detached which is a band F but we pay the same amount of council tax!

Just because a house up north is worth considerably less, doesn't mean the occupant will be paying less council tax. If the properties in a local authority area are mostly in the lower bands, then to raise the same amount of money the council tax for those bands will be higher than properties in the same band in an area where there are many houses in higher bands.

If I had a £2 million house

I would imagine it might be worth taking a sledgehammer to one of the rooms to get the value under the line

Who decides on the property price anyway?

I really hate all these mad suggestions made by politicians. Imagine if they actually stop wasting our money! The gravy train is so incredibly long now I mean it probably covers the country several times over

Like people bricked up windows because of the window tax in 1650 something! A mad idea that’ll cause havoc in the housing market, mostly in the south…

@user90276865197 yes I should've mentioned window tax

I saw an excellent but very creepy painting recently - we were wondering why the windows were kind of covered over (painting is a bit surreal so hard to describe) and my first thought was "did the artist paint this about the window tax era"? 😂

My dd's boyfriends grandma lives in a house worth 1.5 million in London and is cash poor but has lived there years. She is a pensioner and only able to continue living there as has family members lodging there. this kind of tax would likely mean she would have to sell up and the house would likely to be hard to sell.

Sure…we all get onboard, until RR decides that £500k is the value of a home that those with “the biggest shoulders” own, and we’re all screwed. (Even if it was purchased for £100k, and worth £500k today.) Same as they said everyone on £45k is not a “normal working person”.

One of the big problems is that for such a tax to actually raise any serious money the threshold would have to be so low that many asset rich-cash poor people would be caught up in it. I inherited a £2m property which is for sale, but I could no way find £20k a year for it.

A far fairer system would be to end the exemption for primary residences from capital gains tax. That would raise serious money, but only when unearned wealth is realised.

Part of the problem with council tax is that there has never been a revaluation. It was originally intended that there would be a revaluation every 5 years, the same as business rates, but successive governments have got cold feet over doing it. The last attempt would have been 2007, but was once again cance6.The revaluation would be revenue neutral, just a redistribution of the liability. It was done in Wales a few years ago with great success. The other problem with council tax is that the bands stop at H. There needs to be several more bands to reflect very high value properties.

Id be concerned about fiscal drag to be honest. I live in expensive surrey and whilst 2million is buying very large, lovely homes around here at the moment, In 20 years time it could easily cover a standard 1980s, Bovid Homes, 4 bed estate house.

Its not easy to liquidate wealth in a house. You need another source of wealth to pay large costs.

Good points, but I wonder if it would be cleaner to simply assign each property a 'rateable value' based on the purchase price, adjusted according to the property's access to council amenities like schools or libraries, and then raised in line with inflation until the next sale transaction when it is re-rated.

Depends.

I think SDLT and council tax should be scrapped and replaced with an annual charge on property value, for everyone. It’s about the only form of wealth tax that’s workable and it removes the horrible anti-growth anti-mobility effects of SDLT.

But a ‘mansion tax’ without wholesale reform is just yet more tinkering, raising a small amount, driven by Labour’s seemingly endless focus on finding more people to tax rather than fixing fundamentals and growing the economy.

Also interesting that £2m is probably about 50% more than the value of a typical MP’s London home. Conveniently, the rich are always someone else, just a little richer than oneself.

The old system did assign a rateable value to each property and still does in Northern Ireland. This system was replaced by the poll tax, with Council tax brought in hastily to replace the that!
I doubt very, that the Valuation Office Agency has the resources these days to reimplement a domestic rates system

No and I will be extremely pissed off if they put CGT on main homes or make me pay annually just to live in the house we worked hard to buy (out of taxed income).