'Mansion tax' on expensive houses could be in place as early as next year, says Danny Alexander

  • The 'mansion tax' levy is to be imposed on homes worth £2m or more - believed to number about 70,000
  • Mr Alexander admits the tax is not 'punitive' and adds the LibDems are still in favour of wealth creators
  • London Mayor Boris Johnson and PM David Cameron are opposed to the tax but Chancellor George Osborne open to idea

By Paul Donnelley

A ‘mansion tax’ on the country’s most expensive properties could be introduced as early as next year according to Cabinet minister Danny Alexander.

Mr Alexander, the Liberal Democrat Chief Secretary to the Treasury, said that ‘a lot of work’ had already been carried out by Treasury officials on the feasibility of a scheme.

This would mean that the tax could be introduced by a Government elected at next year’s May General Election.

Taxable: This home on the Thames is valued at £3.5m. It would fall foul of a mansion tax if introduced by the next government

Taxable: This home on the Thames is valued at £3.5m. It would fall foul of a mansion tax if introduced by the next government

Speaking to The Daily Telegraph, Mr Alexander said: ‘There’s a consensus among the public that a modest additional levy on higher value properties is a fair and reasonable thing to do in the context of further deficit reduction.

 

‘It's important that the burden is shared.’

The Chief Secretary claimed that the new levy would not be ‘punitive’ and that the Liberal Democrats are still in favour of people creating wealth.

Chief Secretary to the Treasury Danny Alexander has tasked his officials with carrying out a feasibility study on the imposition of the mansion tax

Chief Secretary to the Treasury Danny Alexander has tasked his officials with carrying out a feasibility study on the imposition of the mansion tax

The party believes that the tax should be paid by people whose homes are valued at £2million or more.

Last year, the Treasury estimated that around 55,000 homes would fall into that category although the Liberal Democrats insist the figure is closer to 70,000. Most of the homes that could fall into the taxing bracket are in London and the south–east.

Prime Minister David Cameron is said to be against the tax although Chancellor George Osborne is thought to be more amenable to the idea.

Boris Johnson
Chancellor of the Exchequer George Osborne

Opponents: London Mayor Boris Johnson is opposed to the mansion tax while Chancellor George Osborne is said to be more open to the idea

Boris Johnson, the Mayor of London, vowed last week to oppose any move towards the tax, describing it as ‘brutally unfair on people who happen to be living in family homes’.

Mr Alexander said he planned to soon reveal how the tax would be implemented and how houses would be valued.

The comments below have not been moderated.

Much as I'm in favour of some redistribution of wealth I'm not at all sure about this idea, I'd say tax the income of the rich at a higher rate rather than tax wealth already made because that is a finite resource once it's gone it's gone, However if you tax money as it's made, and at a much higher rate than now, and so long as that making of money continues revenue keeps coming in. Besides the wealthy will find a loophole to avoid this tax anyway perhaps like renting their mansion from their own limited company or some other smart accountants trickery.

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Why are they "Greedy" because they have more money than you? Perhaps they just worked harder and longer than you ever did!

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The rich do not pay the same taxes as the rest of us! Big Businesses and Corporations avoid paying taxes and pay only a percentage of what the average Joe pay, the rest is in off shore accounts not to this government who depend on the average joes taxes to prop up their coffers! Therefore their homes in the UK should therefore have a mansion tax or they should go to live with their non paid taxes in another country! Why should the average Joe be taxed at a higher rate that those who make the big bucks to buy these homes?

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Idiot. The spare bedroom subsidy (aka bedroom tax) is a blatant attack on the poorest people in society. The fault does not lie with people on benefits, this government has not built enough council houses for people to move into. There simply are not any one bedroom properties left so those with least money are having to foot the bill yet again. Not only that, but this government has borrowed more in 3 years than the previous one did in 13, so what's the point?

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Remember the 'Window Tax"

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Thankfully this is not something I have to worry about! However it's ridiculous that some people who have worked hard to afford a property that may perhaps be on a par with a significantly larger property in a different part of the country gets walloped with this just because of where the property is, this is lead by the thought process of 'I can't afford a property that size so why should they' that is just life.....and this idea will alienate a great deal of people, more fool them if they press ahead.

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A lone Voice, Bury St Edmunds, United Kingdom, 1 hour ago Why should people who work for it not keep it Why should they have to pay more tax The real solution is for the government to cut costs reduce the public sector stop giving overseas aid etc.- or make people and business pay the correct tax, by making the rules harder to get around and not introduce new taxes.

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I was just going to say the same thing. Get rid of tax avoidance and evasion before introducing yet another tax.

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Unless of cpurse your business owns the house then its not eligible for a mansion tax. This is what the rich do.

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Mmm have you heard of the tax on enveloped dwellings at 15%, unfortunately if not you really don't know what you are talking about.

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House prices are determined by the market. If this comes in, people will think twice before buying houses around or above the £2m mark. If people won't pay those sort of sums, then the price will have to drop. Given time, the mansion tax could lead to very few homes being worth more than £2m

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and you know what they will do then, well lets make it a million and then better take that down to half a million and so on and all those thinking it is not their problem will soon change their minds by then it will bet too late. this is just the thin end of the wedge.

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Living in a terraced house this tax will never affect me but I think it's wrong, it sends out all the wrong messages, I'd like to think that if I was successful and ever managed to buy such a beautiful property that I wouldn't be taxed just for cheap votes to appease the envious who adopt the attitude that " If I can't afford it, nobody should have it" these people could afford to live elsewhere & pay no tax, are we trying to drive them away like France has done and is now paying the price.

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