Every Labour MP will today receive a letter from campaign group FairHome Tax urging the party to abandon its proposed mansion tax and instead add council tax bands to higher-valued properties as a progressive alternative to fund NHS initiatives.
The FairHome Tax campaign appears to be a small group led by Howard Cox, who in the past has argued for lower fuel taxation.
The letter says:
As you will know, numerous commentators, celebrities and experts have recently made emotive claims for or against Labour's Mansion Tax proposal. We at FairHomeTax wanted to examine this laudably intent proposal objectively.
FairHomeTax is the first campaigning organisation to commission empirical and independent evidence that shows taxing family homes fairly and progressively will raise more revenue to benefit the NHS and local services. We commissioned a report from the Centre for Economics and Business Research (CEBR) with two goals in mind:
1. To ascertain if the proposed Mansion Tax would raise £1.2 billion
2. To look at whether amending the Council Tax system, adding more bands to higher-valued properties, may be a more effective alternative
The compelling findings reveal that:
The Mansion Tax proposal is unlikely to raise £1.2 billion, would be difficult and costly to enforce and likely to create distortions in the housing market
The addition of three Council Tax bands however above H could contribute £4.7 billion additional revenue to tax receipts in 2015-16
This more than trebles the amount your Party claims Mansion Tax will raise for the NHS
A total income from this revised approach to the Treasury and local authorities would be £25.6 billion by 2019-20
It will also reduce the cost of living for those in the lowest priced houses
AND It will only cost £257 million to implement
The results show that those in lower band properties would pay considerably less with the lowest Band A being totally exempt. The CEBR's findings also show there will be a disproportionate direct benefit to public sector workers such as nurses.
You will be pleased to see that, like the Mansion Tax, this reformed system would shift part of the tax burden to occupants of very high value properties and those who have benefited from above average house price growth. But, given that the average cost of moving up one band is £350 annually, the reform is unlikely to create substantial market distortions.
While we ALL support your aspiration to help the NHS, the Mansion Tax will unfortunately kill house sales and have these additional impactful outcomes:
- Stamp Duty will fall by £2bn
- Elderly homeowners will be hardest hit
- It won't raise anywhere near the promised £1.2bn for NHS
- Homeowners will move to avoid this tax or use other ways to legally not pay it
Therefore we believe that Mansion Tax is unworkable and unsustainable. The solution is clear!
Recent research shows that 70% of MPs support Council Tax Reform instead of Mansion Tax, with 40% in your Party. It's been a quarter of a century since Council Tax has been reviewed. The current council tax system places properties into bands based on property values assessed in 1991 and is thus outdated. Our supporters would respect and welcome you debating a fairer way to tax the family home. As a consequence, I would welcome the opportunity to meet with you and see how we can help you get that debate into the House of Commons and so talk instead about taxing family homes more fairly and progressively.
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