Labour would tax homeowners in properties worth above £3m over £10,000 on average per year, in some cases much more, according to research by the Institute for Fiscal Studies.
Under the party’s mansion tax proposals, those in homes worth between £2m to £3m would pay £3000 per year, but those in properties worth over £3m would be slapped with a much bigger bill to make up the £1.2bn the party intends to raise, the IFS has calculated. The money collected by the mansion tax will pay for Labour’s flagship NHS policy.
Shadow chancellor Ed Balls set out more detail on the proposal yesterday, adding that those earning under £42,000 but who live in a high-value home would be able to defer payment of the tax until the property changed hands. The party admitted that this would only apply to a “very small” number of homes. It added that overseas investors would also be hit with a hefty bill.
Labour is yet to announce other mansion tax bands, but there is likely to be a big step up above £3m in order to meet the £1.2bn target, senior economist James Browne at the IFS told City A.M. yesterday.