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?

If Reform get in, they'll be coming for their benefits...

I can see both sides on this particular point, because we all know that the Darlington person definitely isn't getting better services and nor do they have loads of spending money left over, because the majority of north has been neglected for years, wages are low and services are shit!

It would be too complicated (administratively speaking) to deduct the mortgage plus improvements from the projected value current value for the government to tax ‘fairly’.

It would be better to introduce a wealth (asset) tax at say £2 million but allow a fixed £500k discount for debt.
Or introduce a wealth tax at a lower threshold but at a much lower rate, such as 0.25%

I think a wealth tax at 1% + is ridiculous.

Going to have to disagree.
i get paid the same in a school, living in the South West, as someone doing my identical job in Darlington.
They could buy a house on my salary, I could not.
We have no buses going anywhere near where I live.
i live in a small village cul de sac and we have to pay for our own street repairs, lighting etc.
Bin trucks find it too narrow, so we have bin bags.
As we speak, my 65 year old husband is busy plastering a room, after getting in from work at 7pm.
The daily rate of skilled workmen is much higher here, so we do everything ourselves!
My niece in Durham has bought a 3 bed semi for 85k. That wouldn’t buy you half a delapitated garage here!

I can't disagree with your specific example but if you really think that living standards in the north are higher then I suggest spending some time touring around!

Well, it wouldn't be fair that the residents of the property in Mayfair pay for the local services of the Blackpool resident.
It is called Council Tax because it funds local council services.

If we can sell businesses and calculate gains after allowing for acquisition costs, capital expenditure and improvements and even put a value on something as intangible as goodwill - I’m pretty sure we can cope with houses that have had mortgages and renovations. We already have legally documented purchase prices, sale prices and Stamp Duty. That's before we get onto receipts which will have been saved for for qualifying improvements. None of this is unique or complex. Ask anyone who does a tax return.

It would be fairer and more robust than the government marking their own own homework with asset stripping valuations which they then tax owners on.

Wonder if you’ll get a refund if they value your property at £2m and you end up selling it for £1.2m….

You won’t. A parasitic "relationship" only works one way.

how many people have a £2 million asset? Certainly not most of the people in £2 million houses. Most will have mortgages

next thing you know you will make a comment about people who can afford such large mortgages won’t notice the extra cost and then we get back into talking about an increase income tax in which case why not just do that then faff around with this silly tax.

Perhaps if you had to upload receipts and bank statements then AI could cross check it all. Check the companies against the register and the company’s tax returns, similar with the bank statements. Etc.

No. At the £300k level it will have very little impact so no help to ftbs at all.

I don't see why not. Receipts are available for most things and big ticket items usually have an electronic trail.

https://www.telegraph.co.uk/gift/fcee26611a035c95

The chart that shows mansion tax is already distorting the housing market.

Sales bunch below the £2m threshold as ‘cautious’ buyers drive drop in prices

What seems to be missing from much of this discussion is the ordinary working-family household in London and the South East. The coverage tends to alternate between £10m Mayfair homes and elderly people who bought decades ago and might defer the tax.
In my Hertfordshire commuter town, £1.5m currently buys a perfectly lovely but conventional four-bedroom detached house of around 2000 sq ft, including the garage, and in need of modernisation. Families living on roads like that are generally working professionals with children at the same schools and using the same shops as everyone else. They are clearly fortunate and property-wealthy; I’m not claiming otherwise. But they aren’t living a mansion lifestyle, and many will have substantial mortgages.
A national threshold that falls overwhelmingly on London and the South East is regionally concentrated in effect, however neutrally it is written. If the government believes that is fair, it should publish the regional distribution and defend it openly. The repeated comparison between a £10m Mayfair property and a £400k Darlington home avoids the much more representative question of why physically similar family homes are treated entirely differently because one is within London’s economic orbit. Council tax needs proper reform, but this looks like a crude bolt-on rather than that reform.

I agree, @KeepOnCleaning - the talk is always of greedy boomers who bought a house for 25p. My ds lives in a 3-bed flatshare in a conversion in a duff part of London and the flat above him sold for £1.5m. I couldn’t believe it.

I do not live in London but still a £1.5m house round here is pretty ordinary. In fact in a new-build development near me a 3-bed is £1.4m !! With a postage-stamp garden.

I am going to say it again. The mansion tax is a terrible idea as it can crash the London housing market further and the fall out will be awful, as well as the impact on stamp duty take.

I said the same about the Chagos deal and now they are trying to let Trump save them from it!

At some point, someone needs to make some bloody hard decision and LEAD and not hope Trump/IMF/threat of evil banks/crash is going to be somehow saving them from difficult to make decisions.

It's not a mansion tax. It's a high value council tax surcharge.

So it isn't really designed to be applied to properties that conform to peoples expectation of what a mansion is.

It's designed to be applied to properties of high value. Which it does (top 1-2% of properties in the UK).

Regional property markets vary enormously around the UK as we can all see for ourselves. Because we are relocating for retirement to be closer to our DC, I have eyes on two or three postcodes. One is the village where we're selling; the two others in the small Midland city we're going to. Our present spacious glamorous house with a fab view (2,700 Sq ft + 800 sq ft of cellar on a 1/3rd acre plot) is about to be marketed at £675k. Compare this to a new instruction in the destination city which is asking £800k for 2100 sq ft of tired, old-fashioned accommodation. The difference is the local economies and work opportunities.

And the amenities of course!

That is what you'd expect ?

Properties at the top end of the value scale are currently overvalued because they don't pay enough tax relative to those at the bottom.

It's a question of whether you believe the housing market is being distorted by this new charge.

Or whether it's been distorted for the past 30 years by taxes on these high value houses not being in line with those on lower value ones, and what will happen as a result of the application of this tax is simply a correction of this.

Chagos is ridiculous from Labour.

And all these taxes - don’t forget “fully funded, fully costed”.

But the cost of providing services isn't in any way tied to the value of a property. Bin collection, etc, costs almost exactly the same.

What you're claiming is that people who you perceive as 'rich' should pay more for local services, with their house value used as a proxy to decide if they're 'rich'.

And then you want their additional payments to be redistributed to another area, where the inhabitants might already have higher disposable income than the 'rich' people paying the new tax.

No, people should have got their brains in gear and realised that a house to live in, a holiday cottage and a couple of BTL"s wasn"t sustainable if rates went back to more historically normal levels or there was a pushback on immigration.

Yes, but will the new-build sell? There is a massive over supply in London unsold just sitting there, not sure about where you are.