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A Knightsbridge agent has renewed his long-standing opposition to a mansion tax by saying Labour's latest proposals are neither palatable nor fair.

Richard Barber, a partner at W A Ellis, says a suggestion by Shadow Chancellor Ed Balls that there should be four bands in any future Labour mansion tax is a bid to obfuscate the real meaning of the tax and the massive impact it will have on London and the south east.

Balls says the mansion tax to be implemented by Labour if it wins next year's general election will be graduated with owners of homes worth over £5m paying the most, and some cash poor' owners of homes over £2m eligible for tax relief.

Labour says it will use the proceeds of an annual tax on properties worth in excess of £2m to re-introduce the 10p starting rate of income tax scrapped - by Labour - back in 2009.

The lowest of Balls' four bands would be for homes valued at £2m to £5m. In a bid to deflect criticism that this would include modest homes owned by people who were not rich - but who had just lived in the same home for a long period, during which it appreciated extensively - Balls says some asset rich, cash poor' may be able to defer payment of the mansion tax until they sell the property, while others may possibly be eligible for tax relief.

The three higher bands would be from £5m to £10, then £10 to £20m, and finally for those homes valued at over £20m.

Balls says the threshold at which the tax would kick in should rise every year in line with the average increase in house prices rather than the rate of inflation - although he does not say which of the many housing indices would be used to measure this.

The Shadow Chancellor has repeated the suggestion made by other politicians and housing market observers that overseas buyers who have been purchasing high-value homes in London are failing to make a proper tax contribution in this country.

Comments

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    Wow, even more government taxation! I agree with Mr. Barber. These measures would unfairly penalize those who live in 2m-5m properties. Housing in London is extremely expensive, I personally know people who have worked very hard and saved everything in order to afford a decent house in London, and they are not the 'rich people' you think of when you think of mansions. Those who are asset rich and cash poor should not be penalized and forced to sell by the government! This needs to be rethought

    • 25 June 2014 13:08 PM
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