Latest mansion tax should be on top % homes locally not nationallu

[Lionfisher]

Rachel Reeves is front running yet another class warfare policy in the press, this time suggesting everyone who lives in a home over £2m should have to pay 1% on anything above 2m.

First - I’m fine with this. I live in SW London and would probably have to pay some.

But I’m ONLY fine with it if everyone round the country does too. Meaning that it should be on the top 5% of homes by REGION (I’ll leave it to other people to argue what region means, all the data is there to do it).

We could happily sell our 4 bed home and move somewhere else in the country and buy a 10 bed castle. Or just buy another 4 bed home and stash the rest in the markets. TBH we might even do that if this comes in.

But people don’t want us to do this because it prices them out of local homes etc. Which is pretty much what this policy would do, price people out of local homes so they move elsewhere and prices up somewhere else instead.

But more than anything you can be far more rich on far less money in other parts of the country. So this isn’t a tax on property it’s a tax on the south.

As long as top X% of homeowners elsewhere are paying their 1% above their threshold I’ve no issues with this.

But people won’t agree with me as it’s easier to think it should always be “other people” who pay…. or will they?

in what way do you mean following my logic - happy to discuss but not sure what you’re getting at.?

And to the point of taxing equity rather than value - I totally agree. Someone with 100% equity in a small house is far better off than someone paying a mortgage on a big house.

Yeah, let's tax people who are not particularly wealthy but have worked for 25 years to pay off their mortgage and almost have some breathing space. That'll be popular 🤪

If you are talking about the disparity in house prices between the south (huge rise) and north (not much of a rise) then it's unearned if you bought a house and its gone up massively in value over the years without yoi doing anything. You may have to.buy a house which will be more expensive than a northern house but you will have equity that a northerner can only dream of in your house.

It's the main regional.wealth inequality and it's a disaster for the country as a whole. I'm not a lefty or chippy btw just stating facts. A northerner cannot buy an equivalent house for the same price down south sadly. But as the OP said, she could sell her ordinary house and buy a 10 bedroom castle up north. Slightly sticks in ones craw but it's true.

Anyway as I said, the mansion tax is a bad idea anyway.

There should be high/punitive property taxes imposed on foreign owned property

If you don't live in the uk you don't need to own property here.

Capital gains should simply be classed as income and taxed accordingly. Small business owners already get reliefs via BPR.

Every govt leaks its policy ideas to the press to test the water. I work in policy (but not this one!) and we call ideas policies well before they’ve been either agreed or adopted.

There’s a difference between “a policy that does X”… and “govt policy which is that they intend to achieve y”.

A better word might be proposal, but it hasn’t been formally proposed by anyone either. Just leaked (I suspect).

It makes a lot of sense to remove stamp duty and have an annual % tax on property values.

This, they manage it in other countries

@hellohelga“lol no one has a £1.5m mortgage”. You’re obviously living in a bubble. I’ve got friends who live in a £3m house and have a £2m mortgage. And we don’t even live in London.

They should just split the top band in 3, just like they did with a* for gcses!
I’d guess many people with a £700k London home have much less at the end of the month than those up north with a £400k one.

You’ve kind of hit the nail on the head there, it’s not supposed to be popular, it’s supposed to raise money. People don’t like paying tax so a tax will only be popular if OTHER people have to pay it.

She’s trying to raise tax without becoming more unpopular.

She looked at WFA which raised peanuts and said oh god let’s not go there again. And she looked at her private school tax and gone AHA!! That was popular, let’s do that again.

Which is stupid because that’s not where the big taxes will come from in property. They’ll come from putting CGT on EVERYONE. And yes - having conditions is a good idea, eg only taxing half the gains, having a different rate v other CGT. There are lots of options.

ETA sorry that was for @spoonbillstretford but it didn’t quote as my screen oddly glitchy this morning (only on MN)

Not really if you think about it. Someone buys a 3 bedroom house in Brixton in the 90s and someone buys the same house in Byker. Neither do much to the house. In 2025 the London house will have significantly increased in value through no effort by the house owner. Unlike the Byker house. Plenty of people have been made millionaires (on paper. As in they have a valuable asset they can sell if necessary and pocket the equity)in London not by work but simply by where they bought their house. Fact.

I'm not chippy by the way. Such is life. And a mansion tax is a bad idea.

That's where you're wrong as wages are far lower up north but prices in the shops, heating costs and petrol pumps are the same.

We’re getting off topic. This isn’t a reason not to tax people with disproportionately higher value homes ALL over the country.

This doesn't make sense in the context that lots of people have already people a hell of a lot of stamp duty fairly recently. You can't then seek to whack on an annual % tax on the property. This is especially true where interest rates have shot up so people are already servicing more expensive mortgages than they originally envisaged. This plan would cripple households and lead to a lot of forced moves of people in negative equity.

This is bad news for everyone. We need to be very very careful about how we implement and change taxes associated with property.

I worry about this policy as the threshold will likely start at £2m but then end up being a lot less over time before we know it, house prices will have increased and the threshold reduced meaning many normal families will end up paying a mansion tax.

@Marshmallow4545 how does it not make sense? obviously they would work out a time period of exemption. I have moved recently...

Agree. Which is why we need to implement them on sale. You know what the price is, you’ve got the money. 99% of people when they buy a house are taking on debt. Not a good time to add to it.

99% of people when they sell a house are taking out equity even if they use it towards another house. That’s what should be taxed.

A Mansion Tax is just bad policy. It would be very hard to administer over and distort the market. It is also a complete red herring as it wouldn't bring in anywhere near enough money to make a meaningful difference to public finances. We all know that this can only happen with necessary spending cuts the government are too frightened to make or raising one of the big taxes.

It is punitive for the South where houses cost more. It's all very well pretending that people live in the south because the infrastructure is better or whatever else but the reality is that most people live where they work or where they have a family or social network. It is very difficult in this context for people to uproot themselves and move across the country because there is cheaper housing. I don't live in London but I also am not in a position to just randomly move to a cheaper area because housing costs less. This is what keeps people where they are and paying for more expensive housing than they would like.

Some people in the South may be sat on lots of unearned equity but lots of people are struggling with sky high mortgages and ploughing a very large percentage of their monthly earnings into their accommodation. They have less disposable income than their northern counterparts and are expected to be willingly considered wealthy because their money is trapped in a house as opposed to being spent on holidays and cars. It is insane!

CGT tax on main residence would kill the housing market overnight - no one would move house!

Even Dan Neidle, a paid up Labour member, has said it is a terrible idea.

https://taxpolicy.org.uk/2025/08/21/labour-cgt-on-homes-budget-analysis/

Just replying to someone who suggested that northerners had more disposable income than southerners which made me chuckle.

The tax is another chippy one I agree. And won't work. Having said that it is true that a southerner will have valuable equity due to an increase in house prices (assuming they have owned their house for a while) that a northerner won't. Plenty of retired southerners are selling their ordinary houses down south and buying similar in the North and living off the profit. That option is not open to northerners. That's simply a fact. Should that increased equity be taxed on sale? I don't agree with Labour's taxation of envy having kids at private school but plenty of people might think it's a good idea

But people have already paid Stamp Duty once on the house they have bought. Why should they pay it again when they sell?

We all live in massive mansions up north don’t you know! I bought mine (6 bedrooms, 4 bathrooms, swimming pool in the basement) in 2016 for £75 and it’s now worth eleventy billion pounds! And I’m on benefits!

Umm … because they paid the stamp on the VALUE of the house at the time of purchase. You pay CGT on the GAINS… which doesn’t include the value. And is unearned, unproductive and untaxed.

It’s how CGT works for everything…

If you're up north it will probably be worth £70 now, house prices being what they are.

Have you seen how much council tax those people up north are paying compared to London? Yes, the rich down south absolutely need to pay more. Thems up north have some of the highest council tax bands in the country already.

Apologies, I didn't realise you were talking about CGT.

Any CGT must be index linked and account for all renovation and improvement costs. The latter would be hard to evidence retrospectively but is very important.