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Mansion tax to replace 50% rate could hit house prices

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Clegg: Structural changes

Brokers fear the Government’s plans to tax high-end properties could stifle property values at the top end of the market.

Deputy Prime Minister Nick Clegg revealed this week that the Government is planning a tax on high-end properties to fund its plans to scrap the 50 per cent income tax rate.

In an interview in the Financial Times, Clegg suggested measures including changes to the way council tax and stamp duty are structured.

In his Budget speech last week, Chancellor George Osborne said the Govern- ment is stepping up its efforts to find ways of taxing high-end property owners to ensure they pay their fair share.

Simplicity Financial Services principal Rob Downham says the move will lead to sellers accepting lower offers for their homes to avoid paying extra taxes.

He says: “My concern with this is if you are going to make it more expensive to buy £1m-plus properties, the end result is that those properties will reduce in value and we will end up with a glut of houses on the market under the threshold to avoid paying the tax.”

Coreco director Andrew Montlake says: “I do not think this is the best way of remov- ing the 50p tax rate, which I do not have much of a problem with.

“The only real way of having a fair, progressive tax system is to tax people against their earnings. That is the only way you can really look to redistribute wealth, especially when you have people in valuable properties who do not necessarily have the income to match.”

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  1. Michael Fallas 1st April 2011 at 3:15 pm

    Another stupid idea from a Government that seems to be trying to extract any money it can from any easy source it can find without thinking through the consequences.

    Quite how this fits in with their promise to the nation of “freedom, fairness and responsibility” baffles me.

    Taxes must be fair and this is not.

    Surely we deserve better people in power to run our country, so why do we always seem to get the nutters?

    Lets not forget also that whilst Labour was in power for 13 or so years the Conservatives and the Liberal Democrats were in opposition during the same period but proved to be pretty useless to stop Labour running amok.

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