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?

A big part of the puzzle is demographics so benefit spending will only keep increasing. It’s depressing as no party has a solution.

If it's been released in the press it would be prudent to plan on it becoming policy rather than just hope it goes away.

Leaks to the press are front runners to policy introduction. There's no real significant backlash to this so it will go the same way as VAT on school fees.

Poll tax and/or wealth tax would be a better system, or LVT.

The government is falling foul of poor or incorrect tax names, a bit like National Insurance.

Everything was “fully funded and fully costed” apparently. They shouldn’t need more taxes or borrowing.

The first budget was a glaring error and they keep having to catch up with new taxes.

No party is willing to make hard decisions or look long term so we are in a death spiral. The UK isn’t the power it was

get rid of taxes that create friction in the jobs market and work to increase employment/wages/growth and increase income tax

the costs government have are out of control and they can only raise the money by borrowing or raising one/all of the big three taxes. Tinkering with property/wealth taxes isn’t going to do it. We need a government who is legislating for the world we live in - not the one they want us to be in

Other countries who have significant annual property taxes are generally federal and this money is used to fund local services in that area. Therefore, it is demoncratic because local people paying the tax can vote for local politicians offering a manifesto with the right balance of services and taxes to pay for them, in their local area. These countries then have lower national taxes because those are only for things managed at the national level such as defence, energy infrastructure, etc.

I’m not aware of any other country that imposes large land taxes on people only in certain areas of the country, with no democratic mandate to do so, then takes this money into central Government to distribute as it sees fit with no democratic mandate on how it is spent, AND still maintains central taxation levels like ours which are 95% of our tax burden. It’s not comparable.

The US, for example raises 47% of tax at state or local municipal level and only 53% at central Government level. In Japan 23% of taxes are local, 32% in Germany, 35% in Sweden and Switzerland. That is what proper devolution looks like: you devolve powers AND tax raising responsibility for specific services and then local people can vote on how much tax they will pay and what it is spent on. Then everyone can vote on how much taxes should be at national level on services provided nationally.

What you do NOT do is impose local taxes on people and have national Government hoover them up and determine how they are spent, because that way you are having people who WON’T be paying the tax voting to impose it on those who will, and those paying it having no say on what it is spent on. And then people in the areas receiving large subsidies from national tax will of course always vote for local politicians who promise to spray the modt cash around in the knowledge that someone else is paying, leading to enormous waste on pointless projects that are terrible value for money because the local electorate will have no responsibility to actually pay for the local services they are demanding. It’s fundamentally undemocratic and undermines every principle underlying our political system and will obviously lead to further fractured and divided politics and probably civil unrest if this continues, as well as white elephants, corruption and appalling waste.

But a way to hit some with an average sized terrace in London.

Tbf even in London most average sized terraces are not 1.5m plus.

If there is to be a tax on property wealth, it should include all property wealth per person registering ownership on a property.
So an individual landlord or company owning 3 x £500k properties outright would pay.
A married couple owning a single £1.5m property, their primary residence with a £500k mortgage, so each with £0.75m property ‘wealth’ & £250k mortgage debt) between then should not pay.
A married couple with a £3m property owned outright should pay.

The proposals as current are spiteful and ill thought out. The politics of envy.

Added to private sector /private pension further taxation plans, it just adds another significant nail in the UK private sector growth coffin.

They will further kill business growth. Not only of trades people - people will spend less on house renovations, but the next generation of entrepreneurs and future business owners will simply either not bother or go to another country and grow their business there. Taking with them job creation.

Are people really so stupid, that they think this type of plan will not negatively wider future tax revenue. What reasons are there for a young person in the UK to work hard and be self sufficient to simply be taxed heavily at every opportunity.

Also, it will change how people vote. I personally will vote for the strongest opposition to labour at the next general election. Whoever that may be. Need to get them out before they bankrupt the country.

Just like they have trouble defining a working person or the true meaning or wealthy?

For sure there will. But if they win the next election, then once it's in it will have four years to bed in and I suspect any subsequent government will leave it in place and just blame labour for the disruption whilst maintaining that revenue stream.

If you look at say East Dulwich you’ll see plenty of average 3 or 4 bed terrace houses over it.

And if it’s lowered again to £1m as some suggested below there’d not be many houses out of it.

They need to pause the triple lock and put that money into investment.
Scrap NI & roll it into income tax, get rid of the cliff edges.

But maybe growth is impossible now since it has eluded us for so long.

Maybe the UK would actually be better to go bankrupt.
A hard reset on public finances that no political party is prepared to do voluntarily.

Like Greece. Difficult few years, difficult decisions made especially with public spending, but they are on the rise again now, interesting using low tax incentives to encourage new business.

Ireland is another rising ‘business’ star of Europe. Using low taxes to encourage investment.

Oh I bet they will, with some punitive compounding interest rate like the “equity release” scams. A disgraceful thing to do to older people who have no money to pay this and have lived in their homes for decades.

This is the problem: this will primarily target two groups of people: 1) elderly people who do not have the money to pay it; and 2) younger people on good salaries who have enormous mortgage and childcare costs to pay who are already those paying the majority of the tax burden, are suffering from the penal tax rates and cliff edges with the withdrawal of the personal allowance plus student loans etc and - as recent economic studies presented to the Government have shown - actually have LESS disposable income than those living in cheaper areas even though they earn more precisely because they live in areas with such high housing costs and are taxed disproportionately in the higher salaries they get in these areas so that this doesn’t actually compensate for the higher cost of living. And that’s aside from the fact that the second group have large mortgages so this tax would be taxing them on debt, not assets, which is egregious beyond belief.

@EasternStandardyes but London is a lot bigger than East Dulwich…

And even in ED you can get a decent terrace for under 1.5m.

It would be good if we could learn from these countries without going bankrupt!!!

Yes true on both. I was reading about Ireland and that Apple held them to ransom somewhat over tax rates threatening to leave, back in the 90s. It’s worked out well for them.

And Greece too. Maybe the electorate will never go for it as nearly everyone wants to tax someone else more, it takes something else.

Sure but ED is replicated for millions isn’t it? It’s an average zone 2 area with many families.

Wouldn't it just - unfortunately we have the Labour back bench in the way and a PM in thrall to said back bench.

I doubt we will, threads on taxing others more are generally met with yes pls.

Ireland benefited massively from Brexit

I do think the IMF may have to make the hard decisions eg all parties know the triple lock is not sustainable but they won’t touch it

Will it though? Most of London is labour led in terms of constituencies.

Millions!! No, there aren’t millions of homes in London worth 1.5m plus.

“But John Healey, the chancellor, is now considering extending the levy to properties worth more than £1.5 million, according to the Times”

”It would mean the number of properties caught by the tax would more than double to 271,000 homes based on current values.”

Will you be paying it @bingobangsor just another tax on someone else