Balls – Mansion Tax already in planningMake Text Bigger
Ed Balls, the Labour shadow Chancellor, has already asked the Treasury to start planning for the Mansion Tax to be implemented before the General Election. Mr Balls wants the tax to be levied “day one” of a Labour administration and will be part of his first budget raising £1.2 billion to be invested into the NHS.
It is estimated that 100,000 people with properties valued over £2 million would start to pay the levy in the 2015-16 financial year starting April 2015 a month before the May general election.
Mr Balls said in an interview with the Independent ““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. We will have to see the practicalities.”
“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. “I am sure that the Treasury will be gearing up to make sure we can deliver this. As a backstop, we will legislate for the mansion tax to start in the following financial year 2016-17.”
Details of their proposed scheme have been announced on Labour’s own website as below:
Labour’s mansion tax will only apply to homes worth £2 million or more. The vast majority of houses, even in London, are worth far less than this – the tax will apply to fewer than 0.5 per cent of the homes in the country. And the £2 million threshold will rise in line with the average rise in prices of high-value properties over £2 million – so the number of properties paying the tax will not increase. If prime property prices continue rising then by the time the tax is introduced the starting point will be higher than £2 million.
Labour’s mansion tax will protect those who are asset-rich but cash-poor. People in high-value homes who do not have high incomes – those who do not pay the higher or top rate of tax, and earn less than £42,000 a year – will have the right to defer the mansion tax until their property changes hands.
Labour’s mansion tax will be progressive. Those owning properties worth £2-3 million will only pay an extra £250 a month through this new tax – the same as the average top band of council tax. We think that owners and investors in properties worth tens of millions of pounds should make a much bigger contribution. And we will look at asking overseas owners of second homes in the UK to make a larger contribution than people living in their only home. It can’t be right that the foreign buyer of a £140 million flat in Westminster earlier this year will pay just £26 a week in council tax – the same as the average-value property in that council area.
Labour’s mansion tax will use a simple banded system. Valuations will not be needed for most properties – it will be clear which band they fall into. The government’s new tax on properties bought through companies relies on owners submitting a self-valuation to HMRC – so will the mansion tax.
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