Raising taxes on the property rich: a good idea...?

Labour's recent autumn budget introduced tax increases for the largest properties which has been dubbed a mansion tax...

This will mean a re-evaluation of houses in the top three council tax bands so that...

• Properties valued from £2m to £2.5m will pay £2,500

• Properties valued from £2.5m to £3.5m will pay £3,500

• Properties valued from £3.5m to £5m will pay £5,000

• Properties valued at more than £5m will pay £7,500

Not great news for the property rich!

Predictably, the loudest squeals are coming from two groups:---

Barristers and LLP partners, who are already bracing for tax raids; and

Notting Hill and Hampstead pile owners, many of whom bought in at a time when the houses cost about three conkers and a packet of crisps.

But is the mansion tax a reasonable attempt to broaden the tax base — or just another headline-grabbing wheeze that collapses on first contact with maths?

A London Problem Presented as National Policy

This will hit around 150K homes in England and most of these are in London, so this isn't a truly "national" tax as such, it's a London tax!

This has the advantage to the treasury of haivng almost not impact on its vote share - hardly anyone with a £2M property is going to be voting Labour anyway, expect maybe for the biggest losers in this, those who are asset-rich and cash poor.

And this also might break the bank for some higher income earners who are on a fat mortgage just over that £2M barrier, we all have our straws.....!

THe main problem with the tax, however, is that's only likely to raise about £400 million a year.

Final Thoughts

Given the impact, this does naff all, in fact it's just another insult to the super rich, and likely to push even more of the very wealthy out of the UK, you know those 1% who pay hafl of all our taxes!

Hmmm I think the government needs to think again!