DEBATE: Should the Treasury consider a ‘mansion tax’ to help fund spending commitments?
Should the Treasury consider a ‘mansion tax’ to help fund spending commitments?
Robert Palmer, director of Tax Justice UK, says YES
Do you know who pays more in council tax: me in my two-bedroom flat in Kentish Town, or the owner of the £160m penthouse at the top of 1 Hyde Park? Astonishingly, the answer is me.
Our current approach to taxing property is broken. In England, council tax is based on values from 1991. The amount people pay also varies hugely between councils. After a decade of cuts to local government, councils are struggling to fund basic services.
It’s great to see leaks suggesting that the Conservatives might take on this problem by introducing a mansion tax on the most expensive properties or adding more bands at the top.
With council budgets under strain, it’s only right that those living in the most expensive homes contribute a bit more. A well designed mansion tax would raise extra revenue, while protecting most people who haven’t had a real pay rise in a decade. Even better would be to make council tax more directly linked to a property’s value, as they are in the US.
Nickie Aiken, Conservative MP for Cities of London and Westminster, says NO
A “mansion tax” — a new tax on high value homes — is a tax on London. It would totally hammer families and elderly people who have worked hard for years to pay their mortgages, and who have already forked out additional tax such as stamp duty when they bought their homes.
Before we introduce more taxes, let’s reform what we already have, such as the no-longer-fit-for-purpose council tax, where bands are based on property values last reviewed in 1991. Then, the value for a Band H property in Westminster stood at £300,000 — today you’d struggle to find a garage in the heart of my constituency for that.
There are some 2,000 properties in Westminster worth over £10m, and they can pay their fair share through council tax. I raised an additional £600,000 in just one year as Council leader by introducing voluntary community contributions for Band H occupants which funded rough sleeping projects and services for children and young people.
Let’s use common sense and, rather than introducing new taxes, reform the broken council tax system first.