The Mansion Tax

[CPR Dave]

What do we think?

There's a couple of not very big ordinary family homes for sale on my street that will fall foul of this. 

Seems totally arbitrary to tax these people more than others imo. J hope the treasury will pay the cost of collection too, rather than burdening the council who won't benefit at all from this tax.

They should have just increased income tax.

[PeckhamRose]

An interesting point.  In my work I met lots of different people in different circumstances; individuals finding themselves through no fault of their own, living in such houses having inherited them, but not themselves having the means to pay to keep them so they  moved away, or they simply didn't want to move from the place of their family life through generations.  Some of us may think a nice problem to have, but emotionally very difficult a situation to be in.  I agree that income tax always seems to be a fairer way.  My bugbear is and always be taxing private pensions, when one has already paid tax on the earnings that make them up!  The entire amount makes up the tax and not just taxed on the interest made since.  

 

[Reg Smeeton]

You're joking, right?  The 'mansion tax' only kicks in at £2m, at which point it's a mere £2,500 per year.  Houses like that have gained £00's of thousands in recent years, completely free of capital gains tax.  The people who can afford £2m houses have either (a) lived in them for decades, in which case it's almost entirely unearned wealth, or (b) bought recently on a combination of huge salary [out of which £2.5k is peanuts], or (c) on the back of a huge inheritance (more unearned income).   Income tax penalises the workers, wealth tax penalises those who in many cases have landed a large part of this huge wealth without lifting a finger. (As a long term ED resident I count myself in this latter category, by the way - my house is now worth about 10x what I paid for it, my income has maybe doubled in that time).

My heart does NOT bleed for those many elderly couples sitting in multi-million pound houses on Burbage Road - homes that were built with big Victorian families in mind - who might have to fork out £5k more per year for the privilege.  If this really does pinch them financially then perhaps it is time to trade down to the "squalor" of a million pound house or luxury apartment in East Dulwich.  

[ianr]

 

3 hours ago, CPR Dave said:

J hope the treasury will pay the cost of collection too, rather than burdening the council who won't benefit at all from this tax.

"High Value Council Tax Surcharge – The government will introduce the High Value Council Tax Surcharge a new charge on owners of residential property in England worth £2 million or more, starting in 2028-29. Local authorities will collect this revenue on behalf of central government. Revenue will be used to support funding for local government services, with further detail to be set out at the next spending review. The government will consult on implementation of HVCTS in the new year."

https://www.gov.uk/government/publications/budget-2025-document/budget-2025-html#policy-decisions, which shows (Section 5.1, item 54) a projected revenue of £400m in the first year.

Edited 21 minutes ago by ianr

[malumbu]

Don't think I know anyone in a £2m house, so on a personal level irrelevant.

However on a related matter there does need to be reform of Council Tax as many around here have done large extensions but still being charged the same as some who are in properties which have not been touched.

It would be better to discuss the budget as a whole.  Off to do some research on issues that matter to me, sustainable transport, climate change and the like.

[Cyclemonkey]

Won't someone think of the poor people burdened with a £2M house "through no fault of their own" .....  seriously?

This is literally unearned money mainly gained through govenrment policies that has given home ownership preferential treatment for decades but you think it is fairer to rise income tax?  Young graduates are already effectively paying a higher marginal rate of income tax due to student loan repayments and can barely afford to rent in London,   but it is fairer not to touch the unearned housing wealth of boomers?