James Cleverly: I will fight Labour’s anti-London ‘mansion tax’
London will be hit the hardest if Andy Burnham lowers the threshold for the ‘mansion tax’ to £1.5m – which only gets you a flat or an ordinary terraced house in many parts of the capital, says James Cleverly
Andy Burnham’s Family Homes Tax is yet another attack on London.
Last year, Rachel Reeves announced a surcharge of £2,500 to £7,500 a year on homes worth more than £2m. It was billed as a “mansion tax”, supposedly targeting “less than the top 1 per cent of properties”. Now, inevitably, Burnham is considering lowering the threshold to £1.5m. That would more than double the number of homes caught across England, to 271,000, and drag in nearly 62,000 more in London alone.
Outside of London, £1.5m might buy you something resembling a mansion. Inside London, it will often only get you a terraced house with a small garden.
Of the London homes sold between £1.5m and £2m last year, one in six were flats. Most of the rest were terraced houses. Nobody in Lewisham, where I was born, thinks that’s a mansion. Nor do they in Bexley and Bromley, where I served as an Assembly Member, or in Ealing, where I went to university and met my wife.
You can see it on any property app. Three-bedroom terraces across London are on the market for around £1.5m. These are not mansions. They are ordinary family homes on ordinary streets, made expensive by decades of price rises.
The people who live in these homes are not multi-millionaires. They are teachers, nurses, electricians and retired workers who bought a house years ago, paid off the mortgage and raised a family. Hamptons found that 60 per cent of the homeowners who would pay the tax bought their home for less than £1.5m. House price inflation dragged them in. At £2,500 a year, the charge is over £200 a month on top of council tax, for a family whose only crime was buying a house in London a long time ago.
A double whammy for Londoners
Even Sadiq Khan has felt the pressure and now says he opposes it. He is right to. But the Mayor’s objection means little if his colleagues in Downing Street don’t listen.
When I was shadow housing secretary, I kept warning that Labour’s policies were driving up the cost of building. Higher energy costs. Higher material costs. Higher taxes on employing people. That is a double whammy for London. Young Londoners can’t afford a home, because it has been made harder and more expensive to build them. And those who have worked hard to buy their own home are now taxed for it. Labour is punishing both the people trying to get on the housing ladder and the people who climbed it.
It’s also unlikely any of the tax revenue raised from this hike would stay in London. Wandsworth, Kensington and Chelsea, Westminster and Richmond say their residents alone would pay over £270m a year, but not a penny would fund a local service. It goes straight to the Treasury.
At the same time, Labour’s funding formula is stripping money out of those same boroughs, with Wandsworth alone losing £84m. That council’s finance chief called these plans “the most badly designed tax on properties since the one on windows, 330 years ago”. He has a point. Londoners pay more, London keeps less, and the money leaves the capital.
Andy Burnham does not understand London. He sees a city full of wealth and reaches for the cash. He does not see the families who bought a home, raised their children and want to stay put.
London needs a Mayor who will say no to this tax and back Londoners instead of treating them as a cash cow. That is the Mayor I intend to be.
James Cleverly is prospective Conservative candidate for Mayor of London