Red Ed is after your mansion; release the hounds.

Sometimes it just seems like Ed Miliband just doesn’t want to be elected. While the Tories were helping the troubled middle class by extending the fiscal moment at which the 40% band kicks in, “Red Ed” seems intent on bringing nothing but hurt to his middle class kith and kin in London and across the South East.

His “Mansion Tax”, like Stamp Duty and Inheritance Tax, is a tax on social mobility and aspiration, and it’s also going to lose him the next election (if he remembers to campaign of course). It’s also deeply, deeply unfair.

The Mansion Tax – if left un-checked – will force people out of their homes and into the hands of buy-to-let investors; further choking off the housing supply. It is the worst kind of “eat the rich” politics and Ed and his Chancellor, Ed, should be ashamed of themselves.

Red Ed take note, a political rule I always keep to is;

“If John Prescott has disowned you, you’ve probably done something really stupid”.

New analysis by Treasury aides has found that a mansion tax on homes worth over £2 million could leave pensioners facing total taxes worth 43% of the value of their property. The figures are based on an annual levy of £15,400 costing a total of £308,000 if deferred for 20 years added to a £560,000 IHT bill. Negative equity will be the rule rather than exception.

A family home bought in London 30 years ago for £220,000 is now worth £2 million. The Mansion Tax will force out those who are asset rich and cash poor, pensioners and people that have had their homes for generations. If they are made to sell, then this could damage the already fragile property market and also rip asunder the social-economic fabric of the capital.

The only group of any note able to afford homes over the £2m threshold will be the wealthy foreign investors, who have already been accused of driving up house prices and stopping millions of Britons from entering the housing market.

As a point of interest, if you’d like to know what £2 million will buy you in London here’s a link to a 2 bedroom flat in Chelsea you can just about afford –

Ed; this is not going to work so tell us what Plan B is. Here’s one we made earlier.

Like Mel B, Wimpy and Men’s Fashion, Council Tax is stuck in the 90’s. Property is still banded according to their valuations around the time the English were last good at Football.

A revaluation to change this absurd situation was postponed in 2005. Will a re-valuation lose them key votes? Yes it may but not as many as the Mansion Tax will.

The Telegraph tells us that Ed’s approach would undermine basic property rights and target Londoners who are victims of rapid housing inflation. It is so badly designed and illogical, they conclude, it would soon mutate into a fully blown, guillotine yielding, storm the barricades, French-style wealth tax, to the detriment of several generations of ambitious and aspirational Britons.

You have nice things? Says Ed. You must pay to keep your trinkets! I suggest they will take their trinkets elsewhere and the tax receipts of the revenue will reduce in a commensurate fashion.

Tessa Jowell, MP for Dulwich and West Norwood (where a semi-detached will set you back £3 million) is “concerned about…typically older families who are asset rich and income poor. They bought houses 40 years ago, which have appreciated enormously in value and they certainly can’ t afford a mansion tax.’

Even Margaret Hodge, chairman of the Public Accounts Committee and professional angry person says the policy is ‘too crude to work properly’.

There are just over 108,000 homes in the UK valued at more than £2 million, according to the property website Zoopla. Of these, 85,461 are in London (88% of the total), and a further 14,261 are in the South East. Kensington and Chelsea, would pay about 35% of the tax in total.

Great news for the revenue; bad news for anyone in red trousers.

The Mansion Tax is a tax on London. It might be a vote winner, because anything sold as saving the NHS always will be BUT it is a tax on aspiration, and of the age old practice of passing on good fortune through the generations.

It will play well in the hustings but it will drive away investors and entrepreneurs, which is exactly what has happened in France. Wealthy French entrepreneurs and executives now live abroad, ironically in London. Where will they, and you, go next?

This is of course contingent on Boris Johnson failing to secure the position of President of London and taking on fiscal responsibility for the capital.


© LaingRose Ltd. 2020