mansion tax
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Features
Is there any value in a mansion tax?
It has been more or less been killed off by the Chancellor's new Stamp Duty regime - but did the mansion tax ever have much currentcy?
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Guest Blogs
Property taxes must be fair!
I’m writing this article as the Scottish Parliament is about to announce radical changes to Stamp Duty which will come into effect from 1st April 2015. What is proposed is a progressive system rather than the crude system that operates now under which an increase of just £1 in the sale price can trigger an increase in the amount of Stamp Duty due of up to £40,000. I really hope that the Scottish review will cause the UK Parliament to look again at this grossly unfair tax. The current system is completely illogical and perverse and the consequence is that virtually no sales are agreed at prices that slightly exceed the break points of £125,000, £250,000, £500,000, £1 million and £2 million. Why should a buyer of a property at £250,001 pay £5,000 more tax than someone who buys the identical house next door for £250,000? A millionaire in a 10-bed mansion in northern England will pay nowt! The unfairness of the tax causes enormous resentment and distorts the housing market because people will inevitably reduce their offer to the nearest tax threshold. In years gone by, buyers and sellers could find ways around the problem by selling the fixtures…
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Guest Blogs
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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