x
By using this website, you agree to our use of cookies to enhance your experience.
Written by Conor Shilling

A global property firm says that the Labour and Liberal Democrat parties’ proposed mansion tax will be difficult to implement. 
 
Adding bands onto Council Tax has been mooted by many as the preferred method of implementation for the tax on homes worth over £2 million and CBRE says this method provides many challenges.
 
According to CBRE, this method may result in the revaluation of up to 20 million homes across the UK, which could cause unintended redistribution with residences across all price levels being placed in higher bands.
 
Adapting an existing tax may relieve some of the potential issues of implementing an entirely new tax. The firm suggests that the Annual Tax on Enveloped Dwellings (ATED) is a strong candidate for this process.
 
It calculates that there would be at least 82,000 properties that would qualify for a mansion tax should it be introduced. Of these, around 44% will pay £3,000 per annum in Mansion Tax to generate just under £110m of revenue, with the remaining 56% paying approximately £23,775 each, on average, to reach the Labour party goal of £1.2bn per year.
 
Jennet Siebrits, Head of Residential Research at CBRE, commented: “The proposed Mansion Tax is fraught with difficulty: there is no easy way to implement a tax of this type. Adding bands to the existing Council Tax has been suggested as a model for introducing a Mansion Tax, but this could involve a revaluation of up to 20 million homes. This could lead to unintended redistribution effects for other, lower value, home owners.
 
“Using a Council Tax model would also defeat the Labour party’s stated aim to help fund the NHS, because revenue would be collected by local authorities rather than by the Treasury to fund state spending on good causes like the NHS.”
 

Comments

MovePal MovePal MovePal