Greg Hands MP has warned that a Labour Council and any future Labour or Lib-Lab Government could team up to implement a so called ‘mansion tax’ should Labour win the General Election 2015.
The Shadow Chancellor, Ed Balls, confirmed this week, in an interview with the Evening Standard (23rd June) that Labour would introduce new taxes on properties above £2m. Labour have refused to put a value on the likely level of such a tax, but according to the Evening Standard it is ‘expected to cost tens of thousands of pounds’ per year.
The policy announcement brings Labour’s position in line with that of the Liberal Democrats who, in April, promised to introduce a Homes Tax on properties above £2m. Therefore any coalition between Labour and the Lib Dems would also be likely to herald the introduction of the new tax.
However, the Conservatives have raised concerns that such a tax could be unfair and unaffordable. First, many homeowners who may be asset-rich, but cash-poor, could not afford to pay an additional tens of thousands of pounds in tax a year. Secondly, the fast rising values of properties in Britain and particularly London means that far from being a mansion tax, it would hit ordinary families in modest homes.
Warning about the proposals, Greg Hands, MP for Chelsea and Fulham said: “These Labour proposals are worrying, un-workable, and unfair. They would be particularly damaging in my constituency, which has some of the highest property prices in the country.
“This would be introduced as a ‘mansion’ tax, but this is really a ‘homes tax’. Once in place people might suddenly find that their modest home has been classified as a ‘mansion’. Many properties in Chelsea and Fulham which cost £2m, far from being a mansions, are in fact a flats or small houses. Any new housing taxes would invariably spread to more and more ordinary homes.
Such a tax would hit ordinary families who have saved and worked hard. The Conservatives do not think that people who have worked hard and saved up to buy a house should then face the prospect of a tax on their home, and neither do I.”
At the 2012 Conservative Party conference the Chancellor of the Exchequer, George Osborne, confirmed that the Government will not be introducing a mansion tax. In contrast, this Government is keeping council tax down for hardworking people, with bills having been cut by 11 per cent in real terms since 2010.