Labour's mansion tax: Charging foreign buyers and empty houses more would raise same cash for less pain. Targeted taxation could raise more than £6 billion next parliament without hitting cash-strapped families, according to new report
Labour could generate the same amount of money by ditching the mansion tax and instead raising levies on empty houses, foreign buyers and buy-to-let landlords, a new CEBR report has found.
Analysis by the Centre for Economics and Business Research (CEBR) found targeted taxation could raise more than £6 billion next parliament without hitting cash-strapped families. The findings call into question whether Labour’s plans to make people in houses worth more than £2 million pay more is the fairest way to boost revenues through property tax.
Howard Cox (pictured with Ed Balls), who runs centre-right Fair Homes Tax campaign and commissioned the research, said Labour was pursuing the policy for ideological reasons and called on them to reconsider. He criticised Ed Balls, the shadow chancellor, for refusing to consider ditching the mansion tax after the pair met for face-to-face discussions about the findings and other tax changes.
Labour proposes to charge people with a house worth between £2 million and £3 million an extra £250 a month – the equivalent of £3,000 more every year.
The CEBR research found that a similar amount could be raised by more targeted taxation. Charging foreign buyers a higher rate of stamp duty would increase tax revenues by a total of £3.3 billion by 2019-20, the report found. Allowing councils to charge a 100 per cent council tax premium on properties empty for longer than six months would generate an additional £1.3 billion by the end of next parliament while scrapping tax reliefs for buy-to-let landlords would add another £1.5 billion.
Mr Cox met with Mr Balls in Westminster (see photo) on Wednesday to discuss the findings and other tax issues but was left frustrated that the shadow chancellor showed no sign of changing his mansion tax plans.
"After meeting with the shadow chancellor and showing to him a haversack of independently produced evidence from the CEBR it's clear that the Labour Party leadership is not considering other fairer and considerably more effective family home tax raising approaches,” Mr Cox said. "They remain focused on taxing the nation's wealth creators and in many cases asset comfortable but income poor pensioners,” he added, saying the move was "ideologically driven” and reflects the "politics of envy”.