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Johnson makes U-turn on mansion tax plans after heartlands backlash

Prime Minister and his new Chancellor Rishi Sunak say measure is very unlikely to be included in the delayed budget.

Nigel Lewis

Boris Johnson has scrapped government plans to introduce a mansion tax after a backlash from his party’s traditional bricks-and-mortar owning heartland.

Over the weekend the new Chancellor Rishi Sunak said it was ‘highly unlikely’ that the measure would proceed, while the Prime Minister is said to have ‘cooled’ on the idea despite heralding it last week as a key policy to enable the UK to be ‘levelled up’ economically.

But another reason for the ditching of the idea has been forming over the weekend among political commentators; that the mansion tax proposals were part of a plan by Johnson and his chief aide Dominic Cummings to oust Sajid Javid from No.11 if he didn’t go along with their plans to downgrade the power of HM Treasury.

Trevor Abrahmsohn, Glentree Int, imageThe idea was clearly not Javid’s. As property industry figure Trevor Abrahmsohn (left) found out after attending a private meeting recently with the now former Chancellor, he is unlikely to have adopted what has been in the past a Labour policy.

“It was evident that he was a ‘fiscal pragmatist’, i.e. he believed in the notion that taxes are designed to raise as much money as possible for the Treasury, rather than being a cunning, socialist device to ‘redistribute’ wealth or penalise entrepreneurs,” he says.

Also, any form of mansion tax is not a Conservative vote winner. Research last week by The Telegraph showed that hundreds of staunch Conservative constituencies would see high proportions of home owners paying the additional tax.

Within London between 28% and 65% of homes are over £1 million while outside the capital in commuter belt towns such as Guildford or upmarket areas of Manchester, up to 24% of homes would be deemed ‘mansions’ based on price.

 

February 17, 2020

One comment

  1. Good news on the Mansion Tax, but bad news if the budget gets delayed past 11th of March. The market is beginning to be a favourable one for agents, the last thing we need is a delay on whether stamp duty will get an overhaul.

    Uncertainty, can soon squeeze life out of a housing market, let us hope Rishi Sunak does not take too long to unleash what he has hidden away in his little red budget brief-case. The word is he is a spender not a keeper, so maybe some pennies may wash down to some, though it is more likely stamp duty will remain fundamentally as it is for now.

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