Cable Keeps UK Mansion Tax On The Agenda

By Editorial 24 January, 2012

A mansion tax is a "very good idea", the UK Business Secretary Vince Cable has said, calling for the levy to be introduced in the upcoming Budget.

"A mansion tax is still very much on the agenda", Vince Cable said in an interview with the Sunday Telegraph. He added that he had talked with members of the Conservative party who approved of the plan.

According to the paper, an annual levy of 1% would be placed on the value of properties worth over GBP2m (USD3.1m). It is hoped that the tax could raise GBP1.7bn a year in revenue.

Cable slammed rich "foreigners" and a "perverse" system that permits overseas buyers to purchase expensive properties but contribute a mere GBP1,000 per year to the public finances through council tax.

He explained: “It is good for two reasons. It would constitute a tax on wealth rather than income, which we believe to be right, and also in economic terms it creates the right sort of incentives for the property market.”

Cable's support for a mansion tax has long been known. He first proposed the levy at the Liberal Democrats' 2009 conference, when he was acting as their Treasury spokesman. He suggested a levy of GBP5,000 on houses worth over GBP1m, a figure which was later increased to GBP10,000 on those worth over GBP2m.

Once in power, the plan did not make onto the coalition government's platform. There has been talk ever since that the Liberal Democrats will attempt to force the Conservatives into a quid pro quo agreement on the future of wealth and income taxation. It had been thought that, in return for a reduction in the top rate of personal income tax, the Liberal Democrats would insist upon the introduction of a mansion tax.

Chancellor George Osborne will deliver his 2012 Budget on March 21. 

Tags: Expatriates | Tax | Investment | Real-estate Investment | Property Tax | Real-estate | United Kingdom | Tax Thresholds | Tax Reform | Individual Income Tax |


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