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?

Which bit? The house price to earning ratio is much lower in the northeast than where I am.

Do you mean salaries are much, much lower than in the south east (outside london, rather than just a little bit lower?

The thing is minimum wage is the same in both areas, and things like teacher pay scale, nursing pay scale get an extra £1500 a year which doesnt cover the difference in house price at all. If i look at a lot of jobs on indeed they seem be paid very similar. My dh company only gives a tiny supplement to the south east v north east.

But maybe you are thinking top end salaries which i dont know about as its not my world. So senior partners, ceo level.

It is a tax on the rich - the rich just happen to live in the capital city and surrounding areas. Which is the south. I don’t think you realise how much wealthier London is compared to the rest of the country and how lucky you are to live there and your children to grow up there.

I was actually served an Instagram ad for this house the other day and I can’t quite believe it. £3m for 205sq m and it needs a reno, actually unbelievable.

https://www.rightmove.co.uk/properties/166577324#/?channel=RES_BUY

I am not writing off anyone. There are many ways to skin a cat. I'm not saying the North is Eutopia but factually house prices are very affordable there. The earnings to house price ratio is one of the lowest in the country. Rents are also low. It isn't as simple as more investment and higher wages improves living standards if all your costs are spiralling too.

How exactly would they value a house to be worth 2 million if it has not sold in many years? Council worker walking around Richmond or Greenwich with a pen, jotting down various houses. Or would they ask surveyors/estate agents? People would be disincentivised to improve their properties. 2 houses next to each other, identical facade, could be vastly different inside with a different value. You would need a national database of accurate house valuations first.

Well no I don’t think I’d be caught by a wealth tax because I’m not wealthy (although I do pay a lot of tax) my point was that outside London there are fewer wealthy people, and even those in the most expensive 5% of housing don’t benefit from the things London does, which is why property is so much cheaper even an hour away from London.

@PerkyCyanPoet Lucky to have the most expensive unaffordable housing in the country and eye watering mortgages!? I’m sure everyone feels so lucky! The SE does provide better infrastructure but the SE pays way more tax too! I doubt anytime in the NE wants to come to London. Why pay so much more for the same house?

Yes salaries that create meaningful wealth which then supports wealth creator eco systems. The professional service class. It's very limited.

You are comparatively wealthy though in your area. It is all relative. If we compare to the global population than we are almost all wealthy. If we compare ourselves to the wealthiest in the world the. Very few of us are.

Stamp duty is a big one

I want to downsize next few years, get rid of the big mortgage and free up my 4 bed 2 bathroom. Stamp duty as it is really putting me off

Not sure many people would agree with your rejection of investment and higher wages in order to keep a lid on house prices. 😆

The point was no more taxes. Everything was fully funded.

Meanwhile the Amazons of this world pay a tiny proportion of their profits in tax.

Don’t make it easier by discussing who should stump up more.

Labour's manifesto is, "fully funded and fully costed - no ifs, no ands, no buts… no additional tax rises."

"I have been very clear that every policy we announce, and every line in our manifesto, will be fully costed and fully funded."

“Nothing in our plans requires any additional tax to be increased.”

“We’ve got the Office for Budget Responsibility now… You don’t need to win an election to find out [about the public finances].”

“I don’t believe that fiddling around with tax rates is the best way to grow the economy.”

Where I’m from, most young people leave for uni and careers and won’t ever be able to move home. There are no jobs here. Lots move to London for work obviously despite property prices.

So yes to me you’re very lucky to live in London/the south.

They shouldn't tax property unless you own multiple houses. Just because you live in a expensive house doesn't necessarily mean you have bags of cash.

I have worked in 3 to 4 million pound homes where people can't afford repairs, to heat them. I always think why don't they sell up and downsize but it's often emotional links as it was a family home. Regardless it's not my place to judge.

Taxing a home is a blunt instrument that will cause more harm than good.

They would be better looking at HMOs or large buy to let landlords....or even social housing as a means to raise money. I say this because property has become a business with those renting paying a huge price.

Absolutely, but the discussion is about most expensive housing being taxed. I’m incredibly lucky, I have a nice house and cover my bills comfortably, that’s not the experience of the majority of people, but I’m also not in the group of people who have extreme wealth, there is a group who have seen their wealth grow significantly over the past 20 years and it’s reasonable to tax this wealth.

I do pay a decent amount of tax, I have paid inheritance taxes (a small amount before the threshold rose a few years ago) and happily done so because inheritance is an incredible privilege. I am not interested in my house increasing in value, because a house is worth the cost of a house right? I do think we need to urgently build more decent social housing.

ive also been dirt poor and struggling to pay private rent and that was a miserable experience, and I really think we need to urgently improve the situation for private renters.

@Leavesfalling I keep my pit pony in mine.

The most expensive property near me is a mill for sale, it’s a huge factory that would be turned in to a couple of hundred luxury flats if in a desirable city centre. Just as a comparison @PerkyCyanPoet Though we do have places like Harrogate that are really expensive.

@PerkyCyanPoetThey might move to London but they cannot afford to buy property in London! There’s a huge difference in property prices - a doctor can easily buy in the NE, as could a teacher. The state paid workers are well off in some areas. They won’t be anywhere near as well off in London and will be renting for years! Unless they have bank of mum and dad of course. Then look at rents in London! They might get work but costs are sky high.

That's a sales tax. Like VAT. It's not an annual tax applied to ownership

I never claimed it was the latter. But it fall under the category of paying tax to own a house....

Yep. Foolish and unnecessary. Chickens coming home to roost. So disappointed in Labour on this.

Yep. She and Starmer are making awful decisions. Now they have a bigger hole to fill as the last budget was woeful.

I don't really understand your point.

We pay a sales tax on most things. We don't pay a tax on ownership. That's two completely different things and at the heart of my argument.

You buy a coat and pay VAT. You don't subsequently pay tax just because you have retained ownership of the coat. It is setting a new precedent to do this.

Quite a few have bought flats in London actually and some have bought houses in the commuter areas. One of my friends flats in London wasn’t much more expensive than the flat I owned when I lived in Edinburgh, just as a comparison.

London prices are expensive, I’m not disagreeing with you! But living in London/the south has so many other benefits. At the end of the day everyone has free will, if you don’t like living there you can move.

The people who own £2 million houses may well be less wealthy than you. They could have less equity and a higher mortgage. They could have a lower disposable income and less in savings and investments. They might have no pension.

If they turned around and suggested that in fact net wealth should be taxed (pretty reasonable when you think about it!) and that the amount you owned fell into this category then would you accept a charge of 1% annually forever and ever on your assets? I imagine you would instantly see that over 10 years this would be 10% and over 50 years this would be 50% until suddenly you wouldn't have much left at all.

We need to guard against this type of taxation in principle because it is indeed a slippery slope and is extremely hard to apply fairly. I genuinely think you are only in favour of it because you think it won't impact you.

Agree that anyone can move - including those who can’t find work in their area where all their friends and family are - they can move to find work elsewhere, away from their support networks and home.

Yes?