Lib Dems back plans for new annual property tax on rich

The Liberal Democrats are backing plans for a new annual property tax that would cost homeowners with high-value homes thousands of pounds a year.

According to a report in the Telegraph, some Lib Dems are pushing for the annual charge to be levied at up to 1.5 per cent of a property’s value. Others believe the tax should be based on a site’s rental value, according to the report.

The report states Nick Clegg and business secretary Vince Cable are supportive of the idea. The tax is being promoted by a Lib Dem pressure group called Action for Land Taxation and Economic Reform, of which Clegg and Cable are vice presidents.

A Lib Dems source told the Telegraph: “A land value tax is ultimately where many in our party would like to go – particularly as it as a tax on wealth, not income. Will it be Government policy? We will have to wait and see – we are in a Coalition. But there is a good chance it will become party policy. It is the natural successor to a Mansion Tax.”