Mansion tax concerns

[Bilberrybeaut]

The Greens are proposing a mansion tax in the budget, with a rumoured proposed value of ‘mansion’ of £1m. I’m really concerned that this might happen. If it does it would be the final straw for us. We earn well and already pay hundreds of pounds more EACH MONTH in income tax than we would if we lived in England. Our stamp duty was tens of thousands more. A truly insane amount of money. I am taxed so highly that my marginal tax rate is 67% and yet the Greens think I’m not paying enough tax. How much is enough???

If they want to squeeze even more tax out of us we’ll leave. You cannot keep coming back to the same people with the begging bowl. It has got to the stage when they are taking the piss. We’ll go to England and be hundreds of £ better off every month.

The holiday homes issue is appalling, I agree.

Last summer BBC Radio Scotland did a piece on the 67% increase in folk moving from England to Scotland primarily to escape the higher cost of living south of the border.

I have chatted to 6 English couples where one partner commutes to London - those England bound easyjet flights from Inverness are rammed! No brainer. SE salary & relatively cheap housing up here.

Forres had new builds going for 450K. Nairn for 480K. That's not affordable to locals.

However. I also see many poorer English folk walking from the council estate on their school run - and also army families too.

Six of one half a dozen of the other, I guess.

🤣Fitba World Cup will be interesting!!!

(Hopefully friendlier than Old Firm Days 🙏).

I see similar with all the new builds where I live too. Many English families. It is not locals buying up these properties. Never is.

Living in Scotland isn't all that bad OP!

Regarding how £1m+ homes would be identified, the most likely way I believe would be to categorise the main property types (flat, semi, detached etc..) and assign each sqm a value using postcode data matched with HR values from a set period of time.

This would cover additional value added by extensions and the data would be relatively easy to get for most properties using intelligent data extraction on planning documents.

Would imagine a tolerance would be built in to cover the state of repair and minimise grounds for appeal etc..

Typically for these projects it will be a mammoth task, majority will be completed quickly and a small percentage will cause most of the problems.

If this goes ahead I think we should go the full hog and tackle the outdated council tax valuations as well, it’s still based on data from decades ago and we’d probably get more benefits from that.

How about governments growing their economies rather that punishing tax payers for policy failures.

That’s another question entirely, the reason I wrote that was because there were many comments stating how hard it would be to assess qualifying properties when in reality it would be relatively easy to do.

Accurate council tax banding would also help many people.

It will be too expensive and time consuming to send people out. it will almost certainly be a desk based valuation using different sources - which of course will be a far more accurate value than an actual sale price... By the time it comes in 2028, don't be surprised if the boundary has crept down to £750k or even lower. Now the concept has been accepted, it becomes about how far can it be pushed...

And will there be an appeals process? Properties on the boundary of £1m will be tricky to value. They will be depreciated by a certain amount when the ‘mansion tax’ amount is known if they are above the £1m and those under the £1m will be worth more by virtue of them being under the mansion tax valuation. Will the rise in value of these properties tip them over .the £1m?

I’m not quite following about the ease or accuracy @Meeplemakeglasgow - our last home report valuation would be 10 plus years ago, so not really up to date?

agree the whole system needs reform…

That’s why I think they’ll build in a small tolerance.

Think many are overthinking this though, the simplest way to do it would be to assign a sqm value and use that as the golden criteria.

It’s like council tax at the moment, fairly inflexible and not valued individually.

The point I was making is that each house wouldn’t need to be assessed individually, a fair valuation could be created based on house type and postcode from previous home reports or a surveyor panel if none were available.

This would allow them to have a value per sqm and calculate it on the size of the house.

My estimates here but say for example there was a 5k psqm valuation for Merchiston, 3.5k for Giffnock and 1.5k for Stranraer.

A 220m house would be valued at 1.1m, 770k and 330k in these areas respectively and would attract the assigned rates.

The main point I’m making is that a lot of the talk on this thread is how they would assess what is over £1m and what isn’t, with talk about extensions, gardens and even decor, there is no way each house will be assessed in granular detail.

Each will be assigned a value based on standard criteria and that will be the end of it.

Ah thanks @Meeplemakeglasgow thst sounds plausible because otherwise, a £5m budget wouldn’t be going far!

The problem there is that houses is the same postcode may be very different square footage - are these details recorded somewhere? There are expensive streets in Edinburgh with a lot of variation in house size, where some would be 800K and some 1.2 million. I don't see how their square footage would be in public records if they haven't changed hands in many years.

As I said earlier 10% of the properties will give you 90% of the problems.

The majority of houses will be able to be assessed using EPC’s/HR surveys of similar builds, recent bespokes will have architectural plans stored on planning portals which will also have extension plans.

Any true unknowns could possibly be measured using a Mavic 3 drone multiplied by amount of floors building a tolerance for wall thickness etc..

Won’t be 100% accurate but they can measure within 3cm.

The tolerances would keep the number of houses that would require a manual survey extremely small, the reality is that there aren’t that many houses that are over £1m so there’s not really a driver for manually checking every house.

Just to add to this, over 20% of our housing stock (roughly 600k dwellings) have been built in the last 30 years.

Most of these are standard builds that we know the size of.

Also most other city areas are fairly uniform no matter how old they are.

So although there will be undoubtedly a few headaches there is nothing insurmountable.

Seriously. I’m from Edinburgh and I have zero sympathy.

the number of properties in the city that are worth over a million will be pretty small and to be living in one you must be doing well.

Would you rather pay mansion tax or a higher council tax bracket? In my experience these are totally fucked up in Edinburgh. My Two bed flat (Modern) is Band F. Yet all the older flats in the area (worth the same) are B or C.

So yes, maybe the solution is a wholesale revaluation of council tax. Anyone living in a flat built after the mid 1990s is overpaying compared to you assuming your 1 million pound semi is a period property (which I strongly suspect!!)

Very ignorant comment. Especially from someone from Edinburgh. I can assure you very ordinary people that are just getting by will be pushed into this bracket, especially if they bought their property years ago.

I couldn't have set it out as clearly as you but glad you have - this will be a mainly desk-based exercise... IME, the shift in value related to things like internal decor is pretty minimal in terms of home report valuation - surveyors look at sqm, plot size/potential and recent sale prices.

and we've had experience recently of someone quoting for exterior work on the basis of existing overhead google images of our property (used to calculate sqm of work required) and some photos we sent. this is hardly new or ground-breaking, especially given the additional access the SG will have to data.

interestingly, a house sold fairly local to me two years ago that was a right state - and the story was that the previous owners had deliberately removed access/potential access to the first floor rooms in order to minimise council tax years ago. that meant it was in a right state as well! but was also a sandstone villa selling for about half the price of any of its equivalents because it (a) needed so much work and (b) officially it had half the living space available.

Exactly, Google Earth/Maps has a measuring tool that is extremely accurate so that could be used in most circumstances.

Only issue with some properties is the angle of the pictures, but again you’re talking a tiny amount here.

It’s actually been interesting to see the contradictions on this thread, on one hand people say the SG are incompetent and incapable then on the other hand they genuinely think someone has to go around checking wallpaper to assess the value of a house.

Easy to criticise from the sidelines I suppose but if that’s anyone’s first thought I’d make the assumption they wouldn’t manage the country any better.

They can't go by Google earth because a big house in one street might be worth more than the same house in another.
Also it won't indicate the condition of the property, a house with new kitchen etc will be more pricey than a house that hasn't been touched since the 90s

My man criticism is that they haven’t set out the amount of the tax, how they are going to do the valuations is also of interest but not as much as knowing the actual tax. I don’t know what the timeframe is for clarity on that.

Sounds sensible.

Can you explain to me how council tax is currently assessed based on the condition of the house or the internal fittings?

Or will we start taxing people on whether they get their paint from Dulux or Bayliss?

Maybe assess if their kitchen is a Howden or B&Q perhaps?

Or do you maybe, perhaps, think there’s a chance it won’t be assessed to that detail and will be done using they clearly difficult to understand concepts called standardisation and logic?

Like all taxation system a standard value will be given based on set criteria, the purpose isn’t to assess a completely accurate value for each house, it is to attribute a fair value and bracket accordingly.

My previous posts talk about this in detail.

The English mansion tax (yes there is one, just in case everyone thinks this is a tax England don’t have) is calculated using bands on a sliding scale.

2m - 2.5m - £2500

<3.5m - £3500

<5m - £5000

>5m - £7500

All of that would be on top of council tax bands.

As the SG are building it into council tax it is hard to call but I’d imagine something similar with lower thresholds.

Interestingly despite the English tax being set higher at £2m the proportion of properties affected is roughly about the same in the 2 countries.

England - 0.45%

Scotland - 0.4%

Wonder if this was deliberate?