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?

I agree with pp that Labour will likely move the threshold again. It hasn’t even been put in place and they already are looking at shifting it.

Then fiscal drag will kick in and numbers caught will creep up.

Of course with all this it’s taxing someone else hence the endless appetite for more taxes. It’s not working though due to behavioural and economic reality.

How much of that wealth is simply leverage, do you think?

I have never worked out how someone who has £400k equity and a £600k mortgage is more wealthy than a person who owns a £750k house outright.

Absolutely, they’re not - leverage works on rising market/asset values - not the other way round.

Point is - the mansion tax will really hit those who leveraged up post pandemic.
2023-2026 saw gains of about national gains of 5%, whilst the CPI increased by over 10%, so inflation adjusted returns have been negative.

Why should people that live in more expensive houses pay more for council services? I could understand if it was a percentage of earnings, but it's just illogical.

The poll tax was much fairer. A poll tax based upon income should be ideal.

Thin end of the wedge. I think before long Labour will want the tax on anyone with a house worth 1 million. I hope Labour get voted out. They are overtaxing everyone.

It's a wealth tax designed to hit millionaires. It's affects about 100,000 properties in London, where there are 4m or so dwellings - so that is 2.5%. If you own a £2m property, you are wealthy. If just so happens that the journalists and commentators who are complaining about this are wealthy, but think they are not.

Classic Labour. Politics of envy. Squeeze middle earners in the south until they give up / cut their hours.

How are you wealthy is you have a £2m property but only have £400k equity?

As for houses worth a million, that's 2.2% of all housing stock.

I agree - the worry is that anything they implement in the meantime will just be kept and blamed on them. Every new administration blames the one before so we'll be stuck with their magic money tree ideologies for ever more

It’s not raising much either, £800m. They’ll reduce it in time to catch more people.

If you have a 1.6m mortgage, your income must be spectacular, and you'll barely notice this tax. You'd have to be on £300,000 a year, and the tax is £2500 a year.

ahh but that’s a different issue. If you are merely taxing people who wouldn’t miss it then you can simply raise income tax surely?

Not sure they can legislate against our entire legal process and its underlying principles, our system of property rights and protections, the burden of proof in legal proceedings and stacks of case law and legal precedents. To do so they’d have to basically rewrite our entire legal system.

They’re like the Ryanair of politics. They’ll be taxing people on oxygen next.

The purpose of this is to tax wealth and it will do that effectively. You've created an extreme outlier of someone with a £1.6 million mortgage with a vast income who has chosen to put themselves into this situation. It's disingenuous and it's a new version of the "little old lady" argument to stop Daily Mail journalists paying extra tax.

Then it should be a tax on actual assets, not a tax levied in many cases on debt which already means that many of those paying it will already have significantly less disposable income than those who live in cheaper areas and often in much more luxurious houses.

The government can pass any law it likes. That is the will of parliament. A wealth tax in itself is very un British but they are going for it anyway. vAT on education goes against everything that we stood for before that education was a public good but they did it anyway. This government will do anything to raise money on ideological grounds.

He’s screwed
he can’t get the money he needs from the budget

he can’t raise tax even by a penny because of the previous manifesto

he needs a GE so he can set out what he wants to do
but if in his manifesto its hiking up tax / freezing the tax thresholds he will most likely lose

I live in the South East, expensive commuter town

£1.5m gets you a f off detached 5 bed property

tax em I say

It’s playing to the gallery. A tax bringing in £800m so posters will say as you do.

It’ll slide down again as there’s plenty more that can be collected.

And given Labour had apparently “fully costed and fully funded” everything their repeated borrowing and tax hikes show their policies are having bad outcomes.

Of course you're wealthy if you live in a £2m property with £400k equity. If you can't afford your bills, you sell up and move somewhere where £400k plus a mortgage would buy you a stunning house. People with £2m properties have choices, and usually high paying jobs and savings. Jeez, where's my violin?

But it won’t stop at £1.5 million will it?. It will soon drop to £500k- then you will have outliers of people who have equity of £200k being taxed on a £500k property vs someone who owns a £300k property outright paying no tax. If you think the government won’t bring the limits down you are very naive. They were originally talking about £3m, which came down to £2m which now is down to £1.5m. Once the tax is established it will be an easy leaver to pull to raise more

Typical Labour tax. Will actually lose money as it is an envy tax not a money making tax. The loss will come from depressed prices and loss of stamp duty there, which is significant for higher value properties. As we need cash now to service the sovereign debt it is another bonkers Labour tax (its symbolic like private school VAT).