Mansion Tax at £1.5m - what will this mean?

[MaureenOHara]

Does anyone have any idea what this might mean for an individual and what it might do to the market. What happened to the £2m market and will that be replicated or is it different?

1. Means-testing the State Pension

It would take a pension pot of c.£240k each to generate the extra c.£10k needed to bring a married couple up to that level. Most DC pensions are not inflation-linked, so the real value of that £10k will fall over time. Dont you think it would would ne a huge disincentive to save for a private pension if building up your own pension pot meant your State Pension was removed £ for £. Why bother saving? Someone who has spent decades putting money aside could effectively end up no better off than someone who saved nothing and receives the full State Pension. There is a bit of that at the moment already with Pension tax credit. I am sure many people would join me in a chorus of “fuck that!”

As for trying to present the State Pension in the same light as benefits paid to vulnerable people, with the implication that you shouldn’t really be entitled to it, that is divisive and misleading. The State Pension is a contribution-based benefit. Entitlement is built through your National Insurance record. Sure, there isn’t a pot with your name on it, but you have contributed to the system in return for that entitlement.

The welfare state was introduced for everyone, not just the poor and vulnerable. It was a national insurance system intended to provide protection from cradle to grave. It was not supposed to disincentivise or penalise people for being productive, working, saving and providing for themselves. Nor was it set up so successive governments could sacrifice those who have done those things every time they need more money. Particularly when so much of that need has been created by the incompetence of the revolving residents of No. 10, irrespective of the colour of their badge.

As usual, it’s contributors be damned because they have something that someone else doesn’t. It’s never “how do we make fair and sustainable changes that actually lift other people up?” The answer always seems to be to take more from someone else. I think that fundamentally undermines the social contract. If the reward for working, contributing and saving for your own future is that you become an easier target and lose things you have contributed towards, eventually people are going to say: why the fuck should I bother?

This is a ridiculous comment based on the fallacy that if the North experience growth London will suffer rather than benefit. I don't even know where to start with the wrongness of this.

This tax will not remotely have any of the effects you are inventing - dial it back. This tax will affect 2% of Londoners. It will barely impact house prices. People will just pay it. They will not be a mass exodus of people out of London to the North.

I live in London. I chose to live in London. Lots of my friends chose to leave London. If I end up paying more tax, I can live with. It's fine.

Honestly, Labour were insane to promise not to increase income tax - they should just bite the bullet and put 1p on the base rate "for the NHS." This wealth tax is a good start but it barely raises anything.

So are you in line to pay this tax?

Nope. Read my post properly because it answers the counter-arguments you are attempting to make.

Every person who has sold their home and is self funding is likely be paying a higher price for their care that than their state funded neighbours in the same residence. Neighbours who their fees are also likely to be subsidising.

I think property should be more affordable for everybody.

9% of London homes are worth more than £1 million.

https://www.savills.co.uk/insight-and-opinion/savills-news/373662/number-of-property-millionaires-increased-by-34--over-the-past-five-years

There's no way that this tax won't be extended to £1 million properties.

Buy two houses each less than the cut off. Side by side with a secret inner door. 😊

Do you own your property?

Migrant households receive record £12bn in universal credit

Some £7.7bn in payments went to jobless foreign nationals last year, government figures show.

Just so we are clear - this is where 12bn of our tax revenue is going.

But two lots of council tax, so would pretty much cancel out the savings. Plus some councils charge extra for second properties. Also CGT would apply to one house.

We’re not going to improve anything until we are rid of the current Labour government. Until then we’re just treading water at best and hoping they cause as little long term damage as possible. The next government needs to have five priorities which are: growth, growth, then growth, more growth and finally growth. The sooner we have an election, the better.

I don't think you have.

My point is: if accumulating a private pension results in your State Pension being taken away, what is the incentive to save? You have addressed points around that but not the the the fundamental problem I am raising. Your way means that someone could spend decades building a substantial pension pot, only to find that much of the income it generates simply replaces State Pension income they would have received if they not saved. Tapering it doesn't remove that problem; it just changes the rate at which it happens.

Your point 4 makes the contradiction even more obvious. You want to force people to save substantially more into private pensions, while point 1 proposes taking away their State Pension if they successfully accumulate enough. Compulsion might make people save the required minimum, but why would you then create a massive disincentive to save anything more? Surely we actually want as many people as possible building substantial private pensions. The more people provide for themselves, the less dependent they are on the state and the more taxable retirement income they have. Penalising people for saving beyond the minimum is completely counterproductive.

Nor does saying “the State Pension is a benefit” answer my point. It is a contribution-based benefit. Entitlement is built through your NI record. There may not be a personal pot with your name on it, but people have spent decades contributing under a system in which those contributions build an right to a State Pension.

I also made point about the wider social contract. If you continually tell people to work, contribute and provide for themselves, but then treat the fact that they did so as justification for removing things they contributed towards, you absolutely do undermine the incentive to do any of it. So no, I don't think you've addressed my counterargument. You have effectively explained why you think it ok to break the social contact to ensure whoever you have decided are the wealthy pensioners don't receive the State Pension. That's a different argument.

"The State in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family."

William Beveridge - the father of the welfare state

I'm not sure where you're confused?

Equestrian facility for sale in Longnor, Buxton, Derbyshire, SK17
3 bedroom end of terrace house for sale in Appleby Road, London, E8

If I owned the first property outright, would I be more or less wealthy than if I had an £800k mortgage on the second property?

Would I be more or less deserving of paying a 'mansion' tax?

And that's just looking within 40 miles of Manchester, I suspect if I looked at the real north, I could find even bigger houses with even more land which would not be eligible for this tax. Actual mansions, in fact.

If it were a genuine tax on rich people houses, it would be relative - so the 10% most expensive houses in any area, for example. Alternatively it could be based on house size or acreage. Acreage is very logical as people keep saying we need more houses - so those people hogging land that could be used to build on should pay for the privilege. But obviously that wouldn't penalise the evil southerners, so it wouldn't do at all.

That's a harsh way to speak of the pensioners, even though they hold much more wealth than the young.

You have cherry picked somewhat:

"The figures from the Department for Work and Pensions show the amount of universal credit claimed by households with at least one foreign national rose by a quarter from 2024 to 2025"

The Government paid £11.9bn in 2025 in universal credit to such claimants, up from £9.5bn in 2024 and £7.5bn in 2023.

Around one in six (15.6 per cent) of all universal credit payments in the past year were from households with at least one foreign national, according to the data, obtained by the Centre for Migration Control* under freedom of information laws.

Some 65 per cent – or £7.7bn – of the universal credit payments were made to jobless claimants while the overall claims were evenly split between households where at least one foreign national was from outside the European Economic Area".

*The Centre for Migration control is a one man band with an agenda.

Literally the entire UK rests on less than 5 million valuable workers and 1 million properties. All in London and South East.

The rest of the UK is an economic wasteland.

All held to ransom by the back benches and unions.

Fucked, doesn’t begin to describe it.

We both know I was not referring to pensioners - the majority of which have, you know, contributed….

It does feel like this.

No cherrypicking - that was the headline.

You accept its a colossal amount? Perhaps, you dont.

McFadden wasn’t referring to pensioners.

HERE WE GO GUYS - THE FIGHT BACK.

https://shoutunfairtax.uk

On the plus side, this policy is unlikely to be enacted anyway. It would require Burnham to actually make a decision about something.

“We bought a run down bog standard 3 bedroom semi in Zone 4 South London for £550k in 2017. We took out a £500k (5x earnings mortgage).
We lived in a hovel for two years that wasn't really fit for human habitation because we had no money for renovations. We did a bit of work in 2019 to make it livable - new central heating system, new bathroom, DIY IKEA kitchen, replastered and decorated.
We've just finished a major building project and the house is now a six bedroom home with a large rear kitchen/diner/living space.
That was funded by savings and £100k of additional borrowing.
The house is now probably worth between £1.1 & £1.2 million. Our mortgage is £3,300 per month (£40k per year). Council tax is £3k a year.
Now we're in danger of being snared in this envy driven 'tax the rich' bullshit for the temerity if daring to aspire to a better quality of family life.
Fuck off.
We're not rich. We've funded our home purchase and improvements with debt.
This is going to kill the building trade, because you'd have be a total moron to extend your home and get dragged into this shit.”

@ThisOldThang - this sums it up for me. In a thriving economy, you want people to take some risk and create value, both in business/employment and housing and any other assets. Too much regulation and too much taxation and a general bad vibe in the economy and from politicians kills all of that off.
The fact they lowered mansion tax from 2 million down to 1.5 million already sends terrible signals. Because as the above post illustrates people just assume they will be next and adjust their behaviour. I am pretty risk averse, after going back to full time work when my youngest went into year 7, I was hit by the over 60% income tax threshold in my first year back. So straight after, I went back to part time work. There just is a turning point for most people where they aren’t going to work the extra to hand more over and a lot of people in the professional bracket are just that, well off enough to survive, but they aren’t going to be maxing out their efforts or risk taking in this taxation or regulatory environment. Like others on here, the high stamp duty already killed off any desire we had to move to a nicer house/street - this mansion tax is the symbolic nail in the coffin. However, essentially I admit that both DH and I have become less productive because of the tax disincentives more widely in this country. We could both be doing so much more, but there is zero incentive to.
Multiply that up and down the country and you have a dragging unproductive economy for all, including the professional class already squeezed to the max by taxation anyway. And no we aren’t rich, but rich enough to not work harder for peanuts or aspire to more for nothing.

She said "more tax to pay for the unproductive."

I am a pensioner myself. I do no paid work, just some voluntary stuff, and I pay some tax.

I am just as unproductive as a person younger than 66 who is not in paid employment.

Our large and growing older population is a very large cost to the nation. The absurd Triple Lock makes it worse. Synthetic outrage is whipped up at such ideas as not giving WFA to people who don't need it. As a group, older and retired people own most of the nation's wealth, and young people the least.

If she meant to sneer at a particular subset of people not in paid employment, she should have said so. Long-term sick and disabled, for example. Schoolchildren. Carers for aged parents.