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Mansion tax would start on ‘day one’ under Labour

The UK’s wealthiest property owners would face paying the controversial mansion tax from “day one” of a Labour Government, shadow chancellor Ed Balls has said.

In an interview with The Independent, Balls reveals Labour has already asked the Treasury to start preparing for the new levy ahead of the general election next year.

The levy would be applied in the 2015/16 financial year, despite the period beginning before the election takes place in May.

The shadow chancellor plans to raise around £1.2bn a year through an additional levy on properties worth £2m and above. Homes priced between £2m and £3m would pay an extra £3,000 a year, while more expensive properties could face an annual levy of up to £10,000.

Additional revenues raised through the mansion tax will be directed to the NHS.

Balls says: “A charge is paid in that [financial] year on the valuation on a date in that year. We will be clear what we are going to do in our manifesto. No one will have any doubt about our intentions.

“Saving the NHS will be at the heart of our first Budget. I would like to see that revenue coming in in the first year of a Labour government, before the end of the financial year.

“I am sure the Treasury will be gearing up to make sure we can deliver this.”

In October, brokers slammed the proposals as “ill thought out” and “bonkers”, while calling for a review of the council tax system instead of implementing a mansion tax.

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Comments

There are 18 comments at the moment, we would love to hear your opinion too.

  1. Lets hope its the precursor to a proper review of council funding – still working on property valuations from 1991 is absolutely ‘bonkers’….

  2. When will these politicians stop pretending the Treasury can ‘earmark’ tax revenue to specific areas of expenditure e.g. NHS? It is patently abject nonsense! If the shadow Chancellor of the Exchequer does not understand this concept – god help us all!

  3. The exception that proves the rule: Two ‘eads are better than one

  4. “I am sure the Treasury will be gearing up to make sure we can deliver this.”

    Why on earth would they want to do work for a party who are not in Government on something that may never happen!!!

    It is not bonkers….it is balls……

  5. Don’t vote Labour.

  6. Not sure its the Treasury’s job to carry out work based on requests from the opposition, or am I missing something here?

  7. Politics of envy. As most of the tax will be paid by those living down South then Labour think that the North will vote for them. UKIP might just prove them wrong. I the 1970/80 when income tax was 98%for some as soon as it was reduced more tax was paid.!!.

  8. Same old Labour. I thought they had some intelligent people. Obviously I am mistaken. Of course this is Balls. We should have guessed – he was Crash Gordon’s right hand man. He has evidently learned nothing since.

    1% of the population pay almost 30% of all Income Tax. It is these people who will be affected by a Mansion Tax. How many will up sticks to pastures more friendly? Perhaps the Labour party needs to study the Laffer Curve? Maybe if they read something other than the Guardian they might be a little better at economics. Indeed Stamp Duty receipts under the current (newly proposed) regime may decline in the same way as CGT. The Mansion Tax is no way to plug the gap.

  9. @Marty – It’s protocol for the Civil Service to meet with the main opposition party from 6 monthws before the election to find out what their plans are – same thing would have happened in 2009/10.

    Also makes sense from a planning point of view for both the political parties and the Civil Service.

    @Harry Katz – 1% of the population may well pay 30% of all income tax – the more important question is what percentage of the income do they earn? Otherwise the 1% / 30% statement is completely meaningless!

  10. Surely the job is to save the patients of the NHS and not the NHS which is a series of disorganised Trusts.

    Other than that I agree with the comments from the first 8 posters. With Nigel Farage standing in my ward and the previous two MPs (now Con and previously Labour) stepping down or no longer active in politics whether you agree with him or not, locally it looks likely he will be my constituency MP so I will have to deal with him as I did with the previous two incumbents and not with Ed Balls or George Osborne.

  11. Jonathan Treliving 23rd December 2014 at 1:54 pm

    My fear is that this tax will go the way of all taxes in Britain. It will start as a tax on the rich, but through a long term process of salami slicing (i.e. not increasing the thresholds in line with inflation, possibly even reducing them) it will gradually grow to include more and more of us.

    Not to mention that when a new tax is introduced it is here to stay. Stamp Duty was introduced “temporarily” to fund the war effort against Napoleon. Think on that if you will.

  12. The Cynical Broker 23rd December 2014 at 2:10 pm

    The only reason Labour is saying they will pass the alleged £1.2billion to the NHS is try and make it look slightly more palatable than a plate of worms, and try to convince the less well off to vote for them. It’s a cheap, tacky trick, and much beloved by politicians ! If that’s the best they’ve got then finishing behind UKIP is a real possibility!

  13. Another triumph of politcal opportunism over pragmatic reality. If they really think this will actually raise tax, once they’ve paid all the attendant overheads – fought all the marginal review cases and ensuing appeals, I doubt there’ll be much left other than small change.

  14. @ Smithy

    Just look at it a little philosophically. When anyone buys a house the buy it (one presumes) with money they have earned and on which they have paid tax. They now have a tax on the very thing they purchased with tax paid income. There are of course many additional examples of the same thing. I call that double taxation.

    This is why the theory of a flat tax that covers absolutely everything has its attractions.

  15. @ Smithy again

    The 1% pay the highest proportion of tax because they earn more than the rest. The earn more, not because their employers are charitable, but because they contribute most to the firms profitability and therefore by implication contribute most to the country’s GDP. It is these people whose taxes go to support the less well off. Without them – no NHS, no benefits and very little else.

    These people should be cherished not pilloried.

    It’s called capitalism.

  16. And another thought – in the margins I can see this having similarities to the window tax, although rather than bricking upwindows, they’ll be removing extensions they can do without. And what of homes affected by planning blight. At what point in a rising market will homes rise into the bracket – likewise in reverse in a falling market. And if a large property is split into multiple occupany (perhaps with related families).

  17. @Harry – I agree either a flats tax OR even better a PUBLIC declaration of tax paid, not the exact amount, but a band so when we see someone driving a Masarattti, but they are paying NO UK tax we can choose not to do business with them for that reason alone of we want to.

  18. @Phil

    As an Ex Maserati driver I can tell you that you pay plenty of tax with this car. Petrol tax (I was lucky to get 20 mpg). Road Tax – highest band. Buying the car carries car tax. Servicing costs a few quid – so employment is helped. (In my case I also paid UK tax – but as little as possible of course).

    So in your example if someone consults a good IFA and as a result minimises his tax then you should boycott him. Doesn’t make sense to me. If someone is an ex pat remember that they too now pay tax – a minimum of £30k and if they can pay less – then good luck to them. They obviously contribute to the economy in other ways – otherwise why be here?

    If Abromovitch pays minimal tax how many would boycott Chelsea?

    Happy Christmas! (Let’s hope they don’t tax Christmas!)

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