TaxPersonal TaxGovernment considers “mansion tax”

Government considers "mansion tax"

Business secretary Vince Cable said that a tax on expensive property instead of the 50% rate of income tax is a possiblity

THE GOVERNMENT IS considering introducing a “mansion tax” in return for a cut in the 50% tax rate, business secretary Vince Cable has announced.

Chancellor George Osborne announced in the Budget that the 50% top tax rate was a “temporary measure”, and has indicated that this will be lowered before the end of this Parliament in 2015. Cable said that the government was considering how to shift taxation from income to property.

Cable said: “It needs to be a change which is fair overall and does take account of the fact that the wealthy have got to pay their share. And the emphasis may well have to shift from high marginal rates of tax on income which are undesirable, to taxation of wealth, including property.”

The Liberal Democrats had mooted the idea of a mansion tax, which would be an extra levy applicable to people with houses worth more than £2m. When asked by the BBC if this was a possibility, he said: “There is a very strong argument … that you need to have a proper base for taxing property. I’m sure that’s one of the things we’re going to have to look at as we change away from these very high marginal rates.”

The Independent said that it was more likely that a new top band of council tax could be introduced or stamp duty increased for multi-million pound property transactions.

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