Mansion Tax

Vince Cable’s pet hobbyhorse, Mansion Tax, is daft, irresponsible and unworkable – apart from that, a great idea! It will have such a profound effect on the £1m plus residential property sector that a great deal of the revenue/foreign investment earned by Stamp Duty, VAT, Income and Corporation Tax, through estate agents earnings, will be lost. What Cable thinks he will receive by way of £1.6bn revenue for the Exchequer will be dwarfed by what he will lose. Remember, that on a typical £2m house, if the tax is one per cent, it will equate to £20,000 that requires approximately £40,000 to be earned. So effectively, in order to open the door of your £2m house, which, if you are lucky will be in pre-tax earnings, you have a huge burden before you even turn the lights on. And, if you consider that this probably will apply to a 2000sqft property, perhaps 1000sqft in the better parts of London, this cost will be penal and there will be an exodus of wealthy buyers fleeing to Monaco, Dubai, Geneva and anywhere else to escape this harsh regime. As it is, an American family of four will pay a levy of £200,000…

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