Chief Secretary to the Treasury Danny Alexander detailed plans in a speech today which would see additional tax levies placed on homes valued over £2m.
The Liberal Democrat party has long argued for the introduction of a ‘mansion tax’ on high value properties but has faced opposition from the Conservative party. Alexander said linking this additional tax to the existing council tax structure meant the plan could be implemented quickly after the next election.
“The new system I, as a Liberal Democrat, am proposing is really simple,” he said. “A modest additional banded levy on top of council tax for high value properties.
“The annual charges, in addition to council tax will be set out in good time ahead of the General Election next year.
“By building on the council tax system, there will be no need for a detailed valuation of the small proportion of properties affected. Crucially this means that this policy could be implemented quickly after the election.
“And people in homes valued at below £2m would continue to pay just council tax.”
Alexander said it was unfair that properties valued at £700,000 currently have to pay the same council tax as houses worth £7m or £17m.
He said the funds would be collected by local council and then handed over to central government with tax bands reviewed on an annual basis.
“Of course there will be appeals, and of course these will be heard properly, as they are currently with council tax. But with a simple banded structure, and with the level of the bands up rated annually, people living in typical family homes need have no fear of being sucked into this levy.
“So, just as with the increases to the income tax personal allowance, I think there’s widespread support for what is self-evidently a fair correction to an outdated system.”
