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?

@PerkyCyanPoetTheres work in Edinburgh though! That hardly the NE is it?! Very different scenario. Try moving from a poor old mining village to London and buying somewhere! Yes the highly paid few in law and finance can, eventually. But prices are much much higher than most of NE England and you need more multiples of salaries.

Yes. Like I (and most of my school year group) had to do because there are very little further education or career prospects in the Highlands. Imagine that.

You can't pay IHT until you are dead. Your estate pays it. Not your beneficiaries

Just for info.

I’m from the Highlands, I lived in Edinburgh for a bit.

Imagine moving from a tiny tiny Highland village to London and being able to buy somewhere - oh wait, it’s possible because my friends have done it.

Yes your friends in your village in Scotland are probably more wealthy than a NE ex mining villager.

Edinburgh as a capital city has decent house prices too that have increased hugely.

Are crofters known to be wealthy?

Edinburgh is very expensive compared to the rest of Scotland but it is a capital city. What I meant by that comparison is that while it is expensive, it is possible to buy places in London that are actually not too dissimilar to other parts of the country. And I still maintain that people living in London are very lucky to live there.

OK. But not generally. You must admit that buying a London house using the sale proceeds of a similar house from the NE is impossible. It just is.

Also, I'm intrigued about crofters still being a thing? What do they do?

Don’t be daft! If someone in a £2m house has no pension they can move, I’m commuting distance to London (just) and you can get 4 beds and a garage for a quarter of that.
Wealth tax wouldn’t be infinite, it would be a % on assets above a particular amount.

😁

Christ if l had a house worth 2 million ld sell it if l had no pension.

How my heart bleeds for these people with 2m pound houses.

So the fairest way to tax people on property would be capital gains on the unearned money. In your scenario when selling up the person in Brixton would pay much more than the person in Byker as their property would have increased by a much higher amount. Stamp duty on purchase should be abolished and a 5% tax would be paid on the difference between purchase price and sale price. Might work. I’d abolish council tax, it’s a very out of date system that is based on property values from 40 years ago. A two million pound four bed in some parts of London can pay less CT than a three bed semi worth less than a quarter of that in another part of the country. It should be a basic percentage of the current value, with valuations being updated every five years. When I lived in London my CT was £500 a year less than the property I moved to despite my new home costing £200k less than the London house.

But then the property market crashes.

If I have to pay CGT on my primary residence I simply won't move. I paid a large amount of stamp duty when I bought my house. I've lived here for 20 years so much of the gain on paper is actually just inflation. Plus then I've spent a good few hundred thousand on the house which I can't evidence because I never thoughts I'd have to. So instead of downsizing I will sit forever in my house which is too big for just me and DH. There is then no CGT to pay by my estate since at that point IHT kicks in.

The current system of stamp duty being paid by a purchaser works because it's factored into the cost of buying a house which has been valued at the point of the purchase and its factored into affordability/mortgage lending.

It won't happen anyway. Firstly because it will hit many MPs and secondly because there is no possible way of valuing that much housing stock quickly. It would take years for the system to adapt and for enough surveyors to be trained. I know people will say you can use last land registry value and extrapolate from that but you simply can't because people renovate their houses.

Communism it is. I believe Labour is the worse of all governments. So much misery and taxes in education and basic human rights like a house. How can this be legal £20.000 is also after taxes. Homeowners will have to earn a lot more to have £20.000 for the tax. This government is criminal.

It’s not 20000 on 2 million. It’s 1 per cent of the value above 2 million!! So like an extra council tax band that increases progressively. But there is no system in place to value houses accurately and easily so it cannot be easily implemented. The fear of it is what will crash the housing market. It’s only 0.6 per cent of properties that are worth more than two million, but the policy itself will likely cause more damage (if implemented) than revenue raised. It’s like their private school fees VAT and backtracking on winter fuel allowance. Nothing they are proposing is actually raising additional revenue overall! We have well and truly hit the Laffer curve. Taxation has become a political symbolic tool rather than revenue raising which is absurd.

The private school thing has raised more revenue than expected.

That is one statistic figure, to get a fuller complete picture we need to know the cost of students entering state from private, the private schools closure and employment figures impact, the VAT reclaim from private schools.

The private school VAT was ambushed mid academic year unexpectedly so the first take of VAT will be higher, precisely because many schools past most of the cost straight through to parents and increased fees rather than absorb the VAT. However, apparently more than 25000 pupils left and more are still leaving and not joining at usual points. Of course, Labour will bleat about the first ambushed VAT take, that is all they have got.

Exactly. Deliberately destructive timing.

Another factor will be harder to determine but probably the biggest sum to add to the taxpayer's bill being how many parents would have chosen private but for the VAT. This will add years of payments for children to go to state school that would otherwise have been able to be spent by the Education budget on other things. Such as these mysterious teachers we hear so much about.

Yes and a mansion tax would be similar surely because 0.6% of properties is a minuscule amount but to set up a system to value them properly (and how will inflation and increases be dealt with) will surely outweigh much of what they take in. So yet another “stuff the rich”, but stuff the taxpayer too! Just like the private school VAT.
As a taxpayer I object to these symbolic supposed vote winners (they are buying their voter base with my tax money!) that actually end up in us paying more tax. Because they mess things up.
And no I do not have a mansion worth 2 million, just basic common sense.
They will bleat about “oh AI will do the valuations”, all BS.

Farming...set a limit on APR to piss off that rich toff Clarkson. It may lead to the suicide of farmers, the breakup of the family farm held through generations, affect our own food production so we have to pay more to import and raise less money than it takes in administering it. But it sticks it to the rich guy! And that's what matters to us all apparently!

Regardless it is theft and it is criminal. For what is worth is to live in a country your hard earnings is all about paying taxes. Work hard to pay for the people on benefits and people arriving to claim asylum . Do not forget the inheritance tax of 40 percent.

And so it begins.
Chairman Mau suits will become compulsory purchases and fines implemented to ensure they are worn. The pigs will take control.

3.5 years until the next election. Let's march.

Yep - way less hassle and cheaper to put in a stair lift and ground floor shower in a big house than to move.

I’m 40s so not yet - ha ha!!!

Completely agree. It needs to be regionally weighted otherwise people in the north won't have as much opportunity to contribute to the pot than those in the south.

Clearly everyone is desperate to contribute themselves and not just expecting others to pay more tax!