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Mansion levy: Lib Dems' extra council tax bands plan welcomed

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Mansion levy: Lib Dems' extra council tax bands plan welcomed

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Published by Max Salsbury for 24dash.com in Housing and also in Finance, Regulation

mansion mansion

Liberal Democrat plans to impose a levy on mansions worth £2 million+ through new council tax bands rather than through a brand new tax have been welcomed by the British Property Federation.

Speaking at Bloomberg’s European Headquarters today, Treasury chief secretary Danny Alexander said that the Lib Dems’ revised mansion tax plan would mean revaluing homes worth more than £2 million and placing them into a number of additional council tax bands.

Previously, the party had intended to charge owners 1% of the value homes worth £2m+.

The BPF had warned that turning the taxation of high value homes into a political football was "harming investor sentiment".

According to the BPF, uncertainty over the mansion tax has seen some investment delayed and some major development stall, and could dissuade institutional investors from ploughing money into the private rented sector.

Liz Peace, BPF chief executive, said: “We are delighted that the Lib Dems are taking this much more sensible approach to the mansion tax.

"The council tax system remains in principle a better way of taxing property, if the valuations on which it is based are up-to-date. At present we have a property tax that is based on 1991 values, when the average house in the UK was worth, £62,000, the Soviet Union was still in existence and Bryan Adams topped the charts.

"Adding some additional bands of council tax makes sense as a sticking-plaster measure, but ultimately if fairness is politicians’ goal then only a full revaluation in conjunction with more bands will do this.

“We would therefore still like to see all parties commit to a full revaluation of council tax by 2021, and make that part of their next general election manifesto commitments.”

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