All I seem to do these days is stand in the school car park having anguished, if largely pointless chats: the Mansion Tax chat. But let’s call it the Mansion Tax Mumble, since none of us seem willing to disclose the actual sum we paid for our houses.
Soon we may not have to, since if your house is worth more than £2 million it will become perfectly obvious: you may never move again. It may even become the ultimate status symbol. Anyone planning to sell a house at £2.1 or 2.2 million will have to forget it since no estate agent will bother; no viewings, no clicks, no calls. All you can expect is an apologetic, spivvy estate agent from Savills to tell you that the market is ‘sluggish’ before refusing to take your calls.
Announced in this week’s Budget, the Mansion Tax may prove to be the silliest tax ever and one which will distort Britain’s already sclerotic housing market even further. From 2028, owners of properties in England valued at more than £2 million will be liable to pay a surcharge of £2,500 on top of their existing council tax charges.
The surcharge is expected to raise £400 million in 2029/30, slightly less than forecast, and the revenues will be sent to central government rather than remaining with local authorities in the manner of council tax. If your property is worth more than £5 million, you will be on the hook to cough up £7,500 in charges, quite possibly a drop in the ocean to you if you live in a property of that value, but you never know.
Announcing the change on Wednesday, Reeves declared that the Mansion Tax was part of a wider system of measures to ‘tackle longstanding wealth inequality’. All of which makes me long for the days of the window tax (famously introduced in 1696 by William III) because at least you could brick up the odd window to evade it.
Value, then, is what it’s all about. Not precise value, mind you, because the government isn’t into that. In April of this year the Valuation Office Agency, responsible for red book property valuations, was slashed in the name of efficiency, a move that members of the VOA have called ‘a sad day for those who possess an independent mind’.
Of an independent mind myself, I have always been nosily fascinated by how much other people have paid for their houses. Not that I would ever ask them directly, since that would be the equivalent of asking someone at a dinner party how much they earn, a move that would guarantee your place in social purdah.
Instead, I prefer to mentally value other people’s houses by feature, strongly motivated by my own envy (and backed up by private Zoopla searching on the way home). Subtle signs of a house over £2 million are to my mind as follows: built-in floor-to-ceiling bookcases (my editor thinks this is naff), double sink in the master bedroom en suite, Aga (although see several Spectator articles on how this is no longer what it was), boot room with large welly storage painted in Edward Bulmer shades and, of course, a number of what estate agents depressingly call ‘lead-on reception rooms’ instead of drawing room, morning room etc.
All you can expect is an apologetic, spivvy estate agent from Savills to tell you that the market is ‘sluggish’ before refusing to take your calls
But with the advent of the Mansion Tax the showiness of the infamous class of the ‘asset-rich cash-poor’ (ARCPs) who sit at the £1.75-1.95 million property threshold may be about to end. ‘Why bother doing the conservatory?’ one ARCP says while another confides that she might ‘leave things to rot somewhat’ rather than be valued at the dreaded £2 million mark. But it’s not all gloom and doom.
James Mabey, partner at Winckworth Sherwood, estimates that the Mansion Tax may incentivise Boomers to downsize out of the old rectories quicker than they might have done to avoid the inevitable property gridlock. ‘It could have been a lot worse,’ he says, citing the fact that the tax would have been more punitive had the threshold been set at £1.5 million. On this note, I notice no small amount of cynicism elsewhere; ‘classic that they have apparently raised the threshold to save all those champagne socialists in Islington from paying up!’ one tells me with a wry smile.
All of which gets me thinking about value more generally and its slippery semantics. Never has this dance been more important or more complicated under this government. We must come under value in property, squeeze value out of private education, and retain that most elusive thing of all, moral value, when it comes to parenting. Maybe there will be a tax for that soon too; I’ll come in well under threshold, naturally.
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