By Richard Johnstone in Manchester | 23 September 2014
Labour has been accused of ‘abdicating its responsibility’ to reform council tax by proposing a mansion tax on properties worth more than £2m without setting out plans for a wider revaluation.
The British Property Federation said that the party’s plans for a levy on properties worth more than £2m – which was reiterated by shadow chancellor Ed Balls in his speech yesterday – would simply avoid the required revaluation of rates, which are based on 1991 values.
In his speech today, Labour leader Ed Miliband is expected to announce that the funds raised from the levy, which is estimated at £1.7bn per annum, will be used to increase funding for the NHS.
Responding to the plans, BPF policy director Ian Fletcher said that, while he recognised council tax on high-end property was low, these proposals ‘simply abdicate responsibility for necessary council tax reform’.
‘Instead of responsible reform… we get a Mansion Tax, and a political stunt, which has been used before.’
Such a tax would effectively act as a tax on London, where the vast majority of high-value homes are, Fletcher added.
‘In an era of supposed greater devolution, further centralising property taxes can only be considered a retrograde step.
‘The NHS requires funding certainty, but it is far from certain how much a mansion tax would actually raise. Once deferred payment options for those who are asset rich and income poor are taken into account, it is unlikely that it will even reach the projected £1.7bn per annum, which is very little when put into the context of the health budget.’
