Mansion tax is a proposal by the Labour government that, depending on where you live, will either make you worry about the value of your three bedroom flat, or search for vast estates down the road that are still under the 2M threshold.
For example, in Carmarthenshire, there’s a gorgeous 104 acre estate complete with orangery, 10 bedrooms including the additional farmhouse and cottage and utterly breathtaking views – it’s more than just a mansion. Yet, with a guide price of £1,985,000 it’s under the tax threshold.
In contrast, 25 million pounds will buy you a building plot in Finchley. Over twelve times the threshold and you’ll have to provide the bricks yourself.
This incredible difference is what Mylenne Klass was alluding to, with her now famous tirade against Ed Milliband. “Immediately you conjure up an image of these Barbie-esque houses, but in London, which is where 80 per cent of the people who will be paying this tax actually live, have you seen what that amount of money can get you? It’s like a garage.”
Whilst a garage is somewhat of an exaggeration, there are fears that people who bought their houses years ago in cheaper areas will now be penalised by the incredible rate of property inflation, and areas becoming more and more desirable as time goes on.
Labour says that the tax will be progressive, and rise in line with house prices so people won’t be in the position of inflation edging them over the threshold in a few years’ time, and people who are asset-rich but cash-poor will be able to defer the levy, probably until death when it will be paid out of the estate.
The funding raised by the tax is earmarked to help the strained NHS, which will be welcomed by voters. The NHS has come under fire recently, with nurses describing it as “worse than a war zone”.
The mansion tax is unlikely to tug on the heart strings of most voters who could only dream of a £2m mansion, but for those struggling to survive in incredibly expensive areas it could be yet another straw on the back of the donkey.
