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LibDem 'mansion tax' is crumbling
publication date: Dec 11, 2009
 The LibDems have thrown themselves open to much amusement across the media with their squabble over proposals for a Mansion Tax.
Vince
Cable (who doesn’t live in a mansion but does live in one of the most
pleasant areas of southwest London) announced a LibDem plan for a tax
on people who own homes worth more than £1million.
The idea
was that this new tax would be charged at a rate of 0.5 per cent of the
home’s value, per year, so on a house worth £1million, the tax would be
£5,000. On a home in Prime Central London, worth say, £25 million (not
uncommon) the Lib Dem tax would be £125,000. The tax would have
affected an estimated 250,000 homes.
However, the plan provoked
outrage among members of his own party, who either live in such homes
or represent people who do. Those fighting for seats in the election in
high value areas feared that they would not stand a chance of success.
Vince does, of course, represent Twickenham – and he lives there.
In
a masterstroke, LibDem leader Nick Clegg, announced today that the tax
would be adjusted to be due on homes worth £2million or more, reducing
the range of affected homes to just 70,000. So, a £2million homeowner
would have to cough up £20,000 per year, while the oligarch with the
£25 million home would be £250,000 a year worse off.
On BBC
Radio 2’s lunchtime show today (Tuesday) Jeremy Vine spoke to a variety
of Liberal people who argued themselves away from supporting their own
party policy, saying that it was unfair on old people who had a big
house but no cash – Vince Cable had previously said that where this was
the case, the old person should sell their home, then they would a)
have more cash and b) not come into the bracket anyway. Asked if it was
unfair on people who already paid Income Tax at 40 per cent to then
have to pay a further £20,000 out of taxed income they agreed it
probably wasn’t.
In the Propertydrum office we just wonder if its all slightly academic, but a good rumpus all the same!
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