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Mansion tax

(7 Posts)
thistle Fri 09-Mar-12 14:00:12

I suppose it all depends at what point it kicks in, but this mansion tax proposal is worrying me. My late husband and I bought a cottage in the 1970s and because it is in Surrey it is now worth around 2 million pounds.

I haven't stopped working yet but I don't have a pension (I always worked freelance). Everything I have is tied up in this house and I am worried that I may have to sell it and move out of the area (where, though?) if the mansion tax comes in - because although my income is around the national average, my cottage may be considered a mansion! Is there anybody else out there worried about this?

bagitha Fri 09-Mar-12 15:49:56

If your house is a cottage, how can it be a mansion? And vice versa? Sorry if I'm being dense, but it seems to me there's quite an important distinction between the two, regardless of selling value.

thistle Fri 09-Mar-12 16:47:14

My understanding is that houses worth over a certain amount will be taxed, as an alternative to the 50% tax rate on high earners, which doesn't actually bring in as much as it should because really high earners can find ways to avoid paying it - plus the Conservatives would quite like to get rid of it. So the idea is to tax property instead. Vince Cable raised it this week and Ed Balls said Labour would probably back it. One report I read suggested any house worth over £1million would be considered a mansion.

absentgrana Fri 09-Mar-12 17:00:23


effblinder Fri 09-Mar-12 17:19:21

I am imagining an owner of a £1.1m house purposely letting the garden grow over, not painting walls etc in order to keep the value down.

Sorry, back to the serious issue at hand.

bagitha Fri 09-Mar-12 17:23:41

Is it clear how it would work yet? I mean, would people living in houses that were 'worth' a lot less when they bought them yonks ago be taxed before they sold the house or on selling it? That would make a difference.

Not that we need to worry. I'm just curious as to how such a tax would work.

Greatnan Fri 09-Mar-12 18:14:15

'Mansion' tax is just the name - it just means houses worth more than two million pounds. If it is anything like the wealth tax in some countries, it would be payable every year, like income tax. I suppose anyone with that much equity in a house could raise a loan with the house as surety and pay it off when the house was sold (possibly from the estate after the owner's death).
This idea that you can use your house to fund things meant my daughter could not get legal aid for her medical negligence claim, even though she was far to ill to consider moving house, and the equity in it would not pay one fifth of the solicitor's fees.