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?

Labour didn't care about kicking SEN kids out of their schools. They are hardly going to care about house owners.

Or people that bought 4 years ago and will already be in negative equity having paid an awful lot of stamp duty up front? They also will be looking at much higher mortgage rates. No-one seems to care about them.

Very few people will be in negative equity if bought 4 yrs ago even if you add back in stamp duty. They may not have made any money which is a different thing.

"We all need to grow up a bit". And yet you throw around stupid statements about 5 cars and expensive holidays as if we are all sitting on piles of cash living the life of Riley

Op, I lived in a house that was in the top 5% locally price wise, I sold it recently for £525k - you can’t use local measures with housing because it’s so variable, some places are so much cheaper than others

That's not true in lots of regions including London. Lots of places peaked in 2022 and have dropped since then.

I don't think you quite grasp the situation this country is in.

It's so frustrating; our economy is fucked & a large component of that is our distorted housing market. I don't know if this proposal will help but we have to do something. Other countries have property taxes, CGT on main house etc but nobody wants anything to change here. If we have any hope of sorting our productivity we need to do something about housing.

I recently bought in SW London and family would fall into this proposal so I'm unaffected by any change.

Oh, then maybe it's helpful to know that if you're not sitting on a large taxable asset of some kind, then you don't need to worry.

There's little risk of being taxed on things you don't have. Even this lumbering government won't waste its time doing that.

Obviously I think we should focus on wealth taxes on the actual rich, eg people with assets of ten million or more. But those people have bought not just this government but the last and the next, so we'll never get that.

@Marshmallow4545 What is not true? Mortgage lending is generally much tighter now.

Yes, house prices have stagnated & dropped in parts, this doesn't mean negative equity for the majority. They will have put down a deposit and have paid repayments....

Selling your property for what you paid for it 4 years ago or less does not mean you are in negative equity...

There will not be millions of households in negative equity.

The problem in this country is not inequality it’s that everyone wants someone else to pay. And they vote accordingly.

Half a million home owners are currently in negative equity. That's 8%.

Even if we just look at people that have made a loss on their houses. Why on earth should they be taxed on this? It's madness! Where is the moral case?

Inequality will be fixed when there are jobs and when more people are in work.

This budget is not about this. It's punishing and will make everyone poorer.

I think it’s a terrible idea also unworkable and open to easy dodging. If it did come in I agree with you OP, it should be based on region, however that is defined, maybe council areas.

I think CGT is fairer on sale. Scrap stamp duty for anything under something like 2 million.

Actually moving wider tax talk (sorry if a derail). tax all income equally whether from work or passive. It can’t be right you can pay more tax working that income from other things, Get rid of the ability to reduce tax by salary sacrifice, I wonder how much tax income is lost by that. Equalise pension tax relief to a dingle rate. Get rid of NI and put into a single income tax. That would quieten the noise on pensioners not paying NI. Get rid of tax cliff edges for high earners. Massively increase state pension to the living wage - haha controversial I know but wouldn’t that extra income perhaps allow those who have a slightly higher - but not huge - value house to move (they may want to and would also pay CGT like everyone else). And they would pay tax the same as everyone else. Foreign owned house buyers - huge property tax please.

Half a million home owners are currently in negative equity. That's 8%.

So not millions as I said & they won't all have bought in the last 4 years.

Even if we just look at people that have made a loss on their houses. Why on earth should they be taxed on this? It's madness! Where is the moral case?

Moral case for what? I agree recent stamp duty payers should have an exemption. But are you arguing people should not pay a property tax if their home has lost value? Why not? It's not a given your home will keep increasing in value. That mindset is damaging

They are down on housebuilding targets (majorly so) and the housing market is sluggish so housebuilders won’t want to build much more.
I doubt they can afford to interfere with the top level of the residential market and drive prices down further.
https://www.hbf.co.uk/news/sme-home-builders-blocked-by-soaring-costs-and-planning-delays-on-small-sites/
Example of kind of issues.
Rental market is a big problem too. Landlords selling up.

Essentially, everything is overregulated and overpriced and so there is no growth anymore.

So Labour flail around with symbolic rich hater taxes which drive the rich (internationals) away even more, leaving even less in the economy. It is daft, they need to deregulate.
Planning would benefit from AI as they do not have enough personnel. It is too slow.

I just read the comments section on a Daily Mail article about this and was horrified by the fact people were so up in arms about this. The conservatives underfunded the nhs and schools and many other public services and paid for brexit the country is Fucked and needs resources for the basics …. In this situation a charge on those who have enormous houses seems fair. 2million…. I live in London and don’t know anyone who owns a house of that value. I can’t really see why people are describing this as communism. People can’t complain about the state of the Tory destroyed country and at the same time not be open to funding solutions. 2 million how many people even know someone with a house of that value.

Oh it's definitely inequality. The problem is that capital grows faster than the producing economy. So if you have a million pounds, use 150k to live on, what do you do with the rest? You buy assets, like houses. This drives the price of the house up and up until it is out of reach of anyone with income from wages. Over time, all the assets are bought up by the rich and the working people, which is most people (which is probably you too), cannot own anything.

This was the state of the world until WW2 and it's the state we are returning to now.

Labour massively messed up in promising not to raise income tax. They would still have won - albeit with a smaller majority - had they not done that. One of the reasons I stopped voting for them. I thought it wasn’t clever or realistic and they were just trying to appeal to former conservatives.

I don't agree, because wages usually reflect where you live. Houses might be cheaper up North but people are paid less.

We could happily sell our 4 bed home and move somewhere else in the country and buy a 10 bed castle.

Well, do it then. Except there's a reason why you haven't - the 10 bed castle is in the arse end of nowhere.

If everyone upped sticks and moved to cheaper areas, then houses in those areas would become more expensive - basic supply and demand. But that won't happen because there aren't the jobs to support it.

Sorry this seems bonkers.
You're effectively saying as a house is only worth more due to being in london, then property taxes should be reduced. This represents a massive transfer of wealth from poorer areas to richer.
No different to saying my salary is only higher because I work in london, therefore my income tax should be lower than someone in Yorkshire.

We normally only pay tax on profit. That's how the system is designed to work. You don't pay tax on investments that lose money or if you own a business on losses. You don't pay tax on money you have in the bank, only the internet earned.

The idea that you pay tax simply for owning a house is setting a new precedent. We already pay council tax for local services but this isn't about that. It's a wealth tax.

Yes totally agree

the so and sos have already raised up the stamp duty last year

I don’t agree with the property tax

I think the problem is that Labour want to control how people chose to spend their own money (a house, school fees, etc) and are willing to tax those that they deem have made decisions that aren't in accordance with socialist ideology.

But Labour then spend that taxpayers money on ridiculous things like the Chagos deal or paying train drivers even more. Which winds everyone up as it does nothing to improve things that you mention such as the NHS.

Or even better, just increase national debt so that our children and their children pay.

There is a great quote from Alexander Tyler late 1700s which I am fond of quoting:

"
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy"

I live in London because it’s my home, I was born here and have lived here all my life. I also live in London because the industry I work in is predominantly based here.