Lib Dems' mansion tax limit upped to £2m

30 November 2009 | By Natalie Thomas

When the party first unveiled its property tax on the wealthy in September it had originally set the threshold for the tax to be levied on homes worth over £1m.

Under the original proposals the charge would be applied at 0.5%, which the Lib Dems calculated would bring in a tax revenue of £1.25bn.

The tax rate has now risen to 1%.

The Lib Dems also propose to reform the tax system so that the first £10,000 of a person’s salary is not taxable, as well as introducing a pollution tax.

Nick Clegg, leader of the Lib Dems, says: “It is right to ask those with the broadest shoulders to bear a little more of the burden so that millions of people on normal earnings get the break they desperately need.”

But property information website Mouseprice.com has worked out that the reforms actually result in £151m less tax revenue than under the initial plans.

Mouseprice.com says that the number of homes that would be taxed under the Lib Dem plans falls from 105,600 when the planned limit was £1m to just 19,600 now that the threshold is £2m.

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