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Labour Party Conference: Critics slam Miliband’s mansion tax plans
Ed Miliband today confirmed Labour's plans to introduce a "mansion tax" on homes worth more than £2m – but his plans have already met with criticism.
Nick Leeming, chairman of national estate agents Jackson-Stops & Staff, has dubbed it the "Downton Abbey view of politics" claiming it is "distorting" the view of who owns homes worth £2m or more.
He said:
This will affect people all over the country, not just in London where the market has been most buoyant. Many owners are people who have worked hard throughout their lives and have been in their homes for many years, or those who have invested in their home to provide a secure retirement. Many are asset-rich and income poor and the threat of a mansion tax would force these people to sell up.
Analyst Louise Cooper made a similar point in a note ahead of Miliband's speech claiming £2m properties are “far from mansions, and not in prime central London”.
She highlighted this three bed flat in Kingston, a five bed semi in Clapham and a three bed flat in Kings Cross, all of which are going for £2m or more.
Cooper is however taking umbrage less with the mansion tax and more with the general cost of housing, describing the current status quo as “insanity”.
She adds: “Prices must come down. London has to build many more homes or else this city will fail."
Cooper explains:
So much of the country's economic wealth is generated by London and the South East. Its workers must have somewhere to live. If the next generation can only buy a property with support from their parents, then this country will become even less socially mobile than it is already. That will cost the economy.
She argues that it is “political failure over housing policy that has caused London prices to rocket, and now they have, the political class wish to tax it”.
How can we have the vibrant and successful city – the engine of growth for the country – if no one can afford to live in it. Either because of the initial cost of buying a property is so high, or because of the cost if living in a property – the inaccurately named "mansion" tax.
Meanwhile Adam Smith Institute's head of policy Ben Southwood dubbed Miliband's measures as "bizarre".
Labour’s proposal to tax expensive houses and hypothecate the funds for the NHS is bizarre. Although property value taxes are among the least inefficient taxes, and shifting the burden from costlier taxes like stamp duty land tax, corporation tax and income tax is a good idea, we already have a perfectly good property tax system: council tax.
Labour's tax amounts to an average of £12,370 a year, based on figures from Savills.