Labour’s tax on the family home could end up hitting thousands more ordinary people, a senior Labour MP has suggested this week.
An annual tax on properties worth more than £2 million was first proposed by the LibDems in late 2009, and the idea was swiftly adopted by the Labour Party. Labour have, until recently, claimed their proposed homes tax, which they misleadingly call the “Mansion Tax”, might only apply to properties worth more than £2 million.
But now David Lammy MP – now a Labour London Mayor candidate – has said he wants to tax homes worth £1 million or less. In an interview with the London Evening Standard, it was reported that Mr Lammy’s ‘radical blueprint for housing policies would mean bigger bills for many London homeowners, raising billions for affordable housing schemes. Mr Lammy refused to rule out targeting homes worth £1 million or less. That means it would hit many more Londoners than Ed Balls’s plan for a ‘mansion tax’ on homes worth £2 million or more’ (Evening Standard, 4 September 2014).
Greg Hands, MP for Chelsea and Fulham, has long warned that the Homes Tax, far from being a on ‘mansions’ as Labour claim, would in fact become a tax on common London terraced houses and even flats. A quick search of any mainstream property-sale websites reveals there may are hundreds or even thousands of 2 and 3 bedroom flats and small houses, costing between 1 and 1.2 million pounds, currently for sale in London. Such properties are listed and sold at the rate of about one hundred a week.
Greg Hands said this week: “Labour and the Lib-Dems’ proposed ‘homes tax’ is a tax on terraced houses and even flats in this part of London, and therefore an extremely damaging idea. They say it will only hit the rich – but all the evidence suggests it will hit ordinary people too. Anyone with a basic awareness of London property prices knows that far from hitting just the super-rich who may be able to afford such a levy, it would attack ordinary families in more modest homes. There is a real danger that if Labour were to get in at the next election, either by themselves or supported by the Lib-Dems in a coalition, that they would implement this policy.”
This isn’t the first time that Labour have proposed lowering the threshold for a homes tax below £2 million. In August, senior figure Claire Reynolds suggested the tax should apply to houses worth just £400,000 in the North of England.
For all Labour’s assurances that they’ll only be taxing mansions, if they get into government, it’s clear that more and more ordinary families will be hit in the pocket with a tax on the family home.
Greg added: “If Labour win the next election the message is clear – they are going to tax your family home. With Ed Miliband in Downing Street and David Lammy in City Hall, hardworking taxpayers would be hit right in the pocket. Labour simply haven’t learned their lesson: they taxed ordinary families to the brink last time they were in power – and they would do it all over again.”
At the 2012 Conservative Party conference the Chancellor of the Exchequer, George Osborne, confirmed that the present Government will not be introducing any mansion tax. Instead, this Government is keeping council tax down for hardworking people, with bills cut by 11 per cent in real terms since 2010.