Mansion tax will never happen, says property lawyer
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The so-called ‘mansion tax’ on properties over £1m would be impossible to enforce and will never come to fruition, says a property lawyer.
John Stephenson, senior partner at Bircham Dyson Bell, says the overriding unanswered question at the moment is whether the tax will be on the property or the owner.
He says: “If it taxes the property, then it’s just another version of the council tax and will be fraught with problems of how to value the property, how often to value it and by whom - the local authority?
“If it taxes the owner of property, then without a doubt it will see the middle classes as well as senior citizens hit the hardest.
“By the nature of their wealth, the richest property owners will have offshore tax schemes in most cases and will be able to avoid such a tax anyway. It’s simply not enforceable for them.
“Further, in many parts of the country - especially London - £1m doesn’t go very far when buying property and there will be many ’comfortable’ ordinary folk affected by such a tax. It will be a tax on the middle classes.
“I really can’t envisage a way that this will work or be enforceable and the government hasn’t made its plans clear. I honestly don’t believe it will ever happen.”
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Readers' comments (5)
Mark Wadsworth | 11 Apr 2011 12:46 pm
"By the nature of their wealth, the richest property owners will have offshore tax schemes in most cases and will be able to avoid such a tax anyway. It’s simply not enforceable for them."
What a load of drivel. Taxes on land and buildings like Business Rates or Council Tax are impossible to evade and have collection rates of 98%, far better than any other taxes.
This is a first small step towards Land Value Tax and much to be welcomed.
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Mombers | 11 Apr 2011 2:08 pm
*Lots of countries in the world have a property tax - very easy to run
*Everyone knows the market value of their house - much to the detriment of dinner party conversations
*The whole beauty of a property tax is that it is unavoidable. The property cannot be moved offshore. It is also 100% collectable - default on your payment, you hand over the house.
*The asset rich but cash poor could either get a job or raise income from their asset. Both are very positive for the economy. It is not constructive or fair for people who work to fit the entire bill for running the country, and people who own land to get the subsequent windfalls tax free.
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Paul | 11 Apr 2011 3:08 pm
With reference to rich overseas property owners (non-resident non-doms), it puzzles me why the UK allows them to make capital gains tax free when they sell their houses.
France, for example, collects CGT from all sellers through the notary when home sales take place, including from foreigners.
I realise that the tax could be evaded but this nevertheless seems to be the UK leaving money on the table for no reason.
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Anonymous | 11 Apr 2011 3:37 pm
Why should it be hard to value? There are hordes of valuers out there, the problem has alway been for government to decide when to re-value, but indexing it every year to one of the indices would get rid of that, then an automatic check revaluation every five years would work get round that, make the tax no the property with sale possible in the event of non-payment- so that looks like Council Tax? so what? As for the tax on the middle class argument, well who else are you going to tax? surely not the rich? there aren't enough of them, the poor might be an idea but they don't have enough money
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Marc Open | 12 Apr 2011 10:40 am
Why is it to be welcomed at £1m Mark, because you don't own a £1million property ? The politics and tax policy of envy... Higher earners pay 40% tax on their income, 20% VAT, it's enough. There has to be a benefit to working harder and smarter than the next man.
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