The Treasury’s consultation on taxing residential property transactions closes this Thursday, and the Liberal Democrats are using it to push their preferred policy of a full mansion tax. The party has asked its members to send this email to the Treasury:
I am writing in response to HM Treasury’s public consultation on the taxation of residential property transactions. Ultimately, I want the government to go further and introduce a full mansion tax charge of 1 per cent annually on all properties worth £2 million or more, with an option of delaying payment for those who are asset-rich but cash-poor. If the government wants those with the broadest shoulders to bear the burden of austerity then it should look seriously at a full mansion tax. Thank you for including my views on this issue.
It’s worth remembering what happened to the mansion tax in this year’s Budget. The Lib Dems wanted a mansion tax in return for scrapping the 50p rate of tax. George Osborne was happy with this, but David Cameron was not, fearful that it would hit London – and Boris Johnson’s chance of being re-elected just a month and a half later – badly. So the rate did not drop from 50p to 40p as originally expected, but to 45p. The Chancellor then announced a 15 per cent rate of stamp duty land tax on properties worth more than £2 million which are bought through a company.
The Treasury’s consultation is not on a full mansion tax, but on an annual charge on residential properties worth over £2 million owned by something it describes as ‘non-natural persons’: companies, partnerships and investment vehicles to you and me. The Lib Dems want a charge on all properties worth more than £2 million.
The party is looking ahead to its autumn conference, which is themed ‘fairer tax in tough times’ and has ‘Jobs, Education, Environment, Tax’ as the name for its opening rally. As the Lib Dem man in the Treasury, Danny Alexander will have more behind-the-scenes influence over whether a full mansion tax is introduced under the coalition, but the party needs to put on more of a public display for its members. It’s one of the points where the Lib Dems can quite happily differentiate themselves from the Tories, saying they pushed George Osborne for the tax in full, but that the nasty Tories stopped this happening. And then they can take it with them into their manifesto as one of the policies that a Liberal Democrat government would bring to life were it free from the shackles of coalition.