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?

It is now.

Until the good citizens of Chiswick and Richmond realise how much more they will be paying and what’s going to happen to their house price.

This is such a ridiculous comment.

There are huge waiting lists for tradespeople. They will not “lose a job” - they will just move to the next project. Even us scuzzers in 200k houses need plumbers and windows!

Ultimately it’s simply yet further proof that, contrary to their false assurances prior to the general election, Labour has turned off the oven and obsessing about devising ways to steal the remaining crumbs of the last slice of mouldy cake on some people’s plates and moving them onto other plates that are already empty, rather than actually letting us use the oven to bake a new, edible cake so that there’s enough for everyone to have a slice.

@EasternStandardI don’t understand your reply to my post?

Because I corrected you on how many millions will be impacted I have to be in favour? What makes you think that?

Are you not in favour of it? Should they not do this?

If a yes then I agree.

Where did I say I was in favour of it?!

Again why does correcting you mean I’m a fan?

Please don't use a word quite that often if you can't spell it. It's really grating.

Its good simply because buyers will borrow less. Llyods made something obscene like 6 billion just last year on lending. They will simply make less because the mortgage market is so competitive. Which is also a bonus surely ?

Builders make most of their money from large renovations/ extensions not a little bit of plumbing repair and a repaint every few years (which largely, people do themselves anyway, particularly those on with lower incomes). If this tax is introduced people will be far more reticent to extend because people aren’t stupid. This Government is actually seriously proposing reducing the threshold for this tax by 25% before it’s even been implemented! They will then no doubt reduce it again, then freeze it in perpetuity, and fiscal drag from general inflation will mean that it won’t be very long (especially given that their policies are exacerbating inflation) before the majority of family homes pay the tax. Extending homes will therefore become a mugs game and builders may well find themselves with a sharp decline in the large projects which are their bed and butter.

This is the fundamental problem underlying all of Labour’s economic mismanagement. They haven’t grasped the basic economic principle that punitive taxes alter incentives and therefore change human behaviour in response. A good tax system tends to try to incentivise, not penalise, positive behaviour which raises economic performance, productivity and therefore tax revenues (investment, pension saving, work, business formation/ expansion, job creation, education) because this increases overall tax revenue without the need to raise tax rates over and over again to punitive rates to fill the self-created fiscal black hole punitive tax rates create. Raising taxes on positive economic behaviour dampens growth, lowers investment and productivity and decreases overall tax receipts in a self-reinforcing doom loop.

Their own economics advisors have told them this, as could any basic GCSE level economics textbook.

That isn’t going to make a difference though. The government will value the properties and if they deem it to be worth £1.5m then it doesn’t matter if you sold it for less. That is what is so unfair. They will have a license to come into your home to check out the condition inside to inflate the value. The whole thing is frightening tbh.

As said if you don’t want it I agree. It’s a typically bad tax to the hilt idea from Labour.

This, well said. Basic behaviour and economics.

@EasternStandardok why did you think millions would be impacted? 😆

It probably will with Labour eventually as they keep lowering it. Obviously you think it’s a terrible idea anyway but with any luck you can pay too. All good.

I would think that could be challenged in court as it violates fundamental property rights. The state doesn’t have a right of entry to people’s homes unless law enforcement has reasonable evidence that a crime has been committed. Per the law, the onus is on the party making an allegation or assertion (in this case that a property is worth over X amount) to prove it, not for the defending party to disprove it, and there is no caveat that the defending party is required to provide the accuser access to their private property to prove their case.

The law also operates on the principle that any asset valuation arising from an actual sale overrides any estimate because the market has crystallised a determinative price via the transaction.

Unless they want to legislate away our entire system of property law, the burden of proof and legal process, financial law, etc and cause complete market chaos by setting legal precedents the fundamentally undermine our entire rule of law and financial system, I presume there will be some sensible civil servants who point out to them that their favoured outcomes are simply incompatible with the rest of UK law (and indeed, much of international law as well).

this has already come out that this is the plan. They will legislate accordingly I am sure.

Exactly but apparently completely beyond the understanding of this Gov and their electorate

The law of unintended consequences strikes again!

And the benefit bill will rise because many of the affected properties are rented to housing benefit recipients.

I live in a very very expensive area in the south east and yes it will include a lot of the houses here. Having said that, the people I know how have these £1.5m houses are very well off.
They really aren’t in the “3 bed terrace” scheme of things. More like 4/5 bed detached minimum.

As someone else said, this is tinkering around the edges.
It’s not going to improve anything tangible, for anyone.
Benefits Britain is just in a managed decline.
It might well be better for a proper crash and the IMF come in and make us take the medicine.

I think LLs selling their rental properties is already doing this.
I don’t think it is a bad thing if house prices come down.
I just think 1.5 million is not a lot in some places. Perhaps houses of under a certain floor area should not be classed as mansions and excused.

It’s not a ‘mansion’ tax though, it’s a high value property tax.
Size has nothing to do with it.

Not millions. Nowhere near.

There are an estimated 673,143 homes worth £1 million or more in Britain, which is 63,500 fewer than during the 2022 mini-housing boom.

The decline is attributed to higher mortgage costs, changing lifestyle priorities, and tougher tax measures on prime properties.

Approximately half of all million-pound properties are located in London, with the South East and South West experiencing some values falling back below the £1 million threshold.

I’m just not sure this will help reduce prices

i know families in zone 2 who have 4 or 5 living in a 2 bed flat. Don’t qualify for housing benefits but want to live where they grew up and near where they work. Overcrowding isn’t just an issue for council tenants

rather than spending time on this they would be better putting in a proper housing strategy

in my area they are about to have the mayor push through a 27 storey tower block with 242 student rooms. Is that really the best use for that land?

Not to mention this will deter people from doing home improvements that might take them over the threshold. So knock on effects for the building trade too.