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Thursday, November 13, 2014


Proposals for a "Mansion Tax” claim that it would be a targeted and efficient tax that would be paid only by the very wealthy, and that high value residential property makes an unfairly modest contribution to tax receipts. These claims are flawed. A Mansion Tax would not take account of an individual’s ability to pay that tax. It would penalise those on low incomes living in parts of Britain where property happened to have substantially increased in value during the property boom or, in the case of elderly owners, during their period of ownership. It would be very complex to administer and collect. Accurate valuations of high value individual properties (which are by definition illiquid) are difficult to establish as:
  • there is little comparable transactional evidence;
  • an individual property’s value is determined by the interaction of many different, often intangible, attributes.
  • there would also be a high likelihood of legal dispute and calls for revaluation.
The UK already has by far the highest property tax take of all OECD countries (at 4.2% of GDP compared to an average of 1.8%). High value residential properties already make a high tax contribution:
  •  their Council Tax bills are twice the national average.
  • the highest 1.6% of sales yielded £1.2 billion in stamp duty in 2010. This is equivalent to 26% of all residential stamp duty. The new upper 5% Stamp Duty band will add around £290 million a year. Tightening up evasion would add another £150 million or so a year (assuming one in 10 transactions over £1 million avoid stamp duty).
  • the top 0.7% of housing stock held at death contributes 36% of inheritance tax receipts from residential property.
It is likely that a Mansion Tax would raise, at most, £1 billion – the equivalent of 0.2% of total tax revenues. But the damage it could do could be far greater, particularly if it undermined the UK’s attraction to
international entrepreneurs and investors.


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[ posted by benj, 29.11.14 17:11 ]

The Mansion Tax is not a tax on income or capital. It is a user fee, so the ability to pay is as relevant as it is for any other good or service.

Which is why, unlike taxes on income/capital it doesn't shrink GDP. And why economists advise we should be shifting away from taxes to user fees on land titles. Like the Mansion Tax

Property taxes are the cheapest to administer out of all the various forms of raising State revenue. Eric Pickles MP stated that valuations would cost no more than £10 per property. ATED has exceeded expectations in terms of revenue and efficiency.

ONS figures prove, that the number of cash poor/asset rich affected by the one off transition in changes to property taxes are very small. These can easily be dealt with by roll up and deferment.

Let us not forget that those who bought their home before 1986, under the old domestic rates, expected to pay 1% of total property value in taxes. So, they haven't got a leg to stand on.

OECD figures are supplied to them by individual government so are very misleading to those not familiar with international tax codes.

For example. The UK includes a very broad range of wealth taxes and high levels of Business Rates.

nf the US for example, flat yearly property taxes average 1.4% of property value.

In the UK highly regressive Council Tax accounts for 0.4%. If we remove the Poll Tax element from Council Tax the part that relates to property value is 0.1%

So, 0.1% in the UK vs 1.4% in the US.

Even taken as a bundle of property and wealth taxes, Council Tax, CGT, SDLT, Inheritance Tax, TV Licence, they only come to 0.7% of property value.

Council Tax Band A pays the equivalent of 1% on average, of property value.

Redistentual property taxation in the UK is low and regressive. The OECD, IMF and World bank recommends all Countries raise charges against immovable property and lower taxes that penalise work and enterprise.

The Mansion Tax de-capitalises selling prices and lowers rent by the amount it raises. This means no one who buys in the future will be paying more overall. If the revenue is used to lower taxes on income/capital, that will attract more investors not drive them away.

Taxing income and capital are both immoral and highly damaging to the economy. People should only instead be asked to pay for exactly the benefits they receive. The Mansion Tax is a step forward to that Capitalist Utopia.






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The Campaign for Fairer Tax on UK Homes is run by Howard Cox, the founder of the FairFuelUK Campaign.  Howard Cox is a staunch campaigner for stimulating the economy, motivating consumers and fighting unfair taxation. FairFuelUK, is the Nationally Recognised Award Winning Campaign fighting for lower petrol & diesel prices and is widely accredited with stopping £30 billion of road user taxes being levied on businesses & public in this Parliament. Without FairFuelUK prices at the pumps would be over £1.60 per litre. Its time for all Parties to recognise that the family home is not the tax cash cow for their spending aspirations. A property taxation reform is long overdue.