Lib Dems scale back mansion tax plans

30 November 2009 9:14 am | By Lee Jones

LibDem Shadow Chancellor Vince Cable announced plans for a ‘mansion tax’ of 0.5 per cent on any properties over £1m at the Party’s annual conference in September. LibDem leader Nick Clegg will today announce that the threshold would be increased to £2m and the tax to 1 per cent after many within the Party criticised Cable’s plan.

LibDem MPs feared a £1m mansion tax would alienate some voters, particularly in the South East of England. Leader Nick Clegg told the BBC that the mansion tax “principle” remained the same but “we just looked at the figures”.

He told BBC Radio Four: “The principle is very clear. People who live in very large houses, mansions, should pay some more money, so we can give some back to the majority of British taxpayers.It does what it says on the tin. It’s a mansion tax. It goes towards what many people want from the tax system.”

The party will say that the mansion tax proceeds will be used to help lower earners. The party will also announce a cessation of income tax to the 4 million Brits earning less than £10,000 a year.

The speech will also include plans to scrap tax relief on pension contributions for higher rate taxpayers. Clegg has previously said he wants to close the “loopholes” of capital gains tax and pension tax relief so as to aid those on the lowest incomes.

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