Vince\’s Mansion Tax

The top rate of tax could be replaced with a mansion tax or a levy on the richest in society if it is scrapped,

The problem with the mansion tax, as was pointed out when Vince first suggested it, is that it\’s not so much a tax on wealth as a tax on geography.

Property prices vary wildly around the country: £2 million might buy a decent house in Fulham (no, not a mansion, just a decent family house) while I\’m not sure it\’s actually possible to pay £2 million for a single family house in Wales at all is it?

To some extent this is true of income tax as well: wages are higher in London, people working in London on the average wages for the area pay higher marginal rates than those working on average wages elsewhere: because those average rates are higher. And the cost of living there is higher, at least in part due to those higher property prices.

But it\’s still true that higher property taxes based on a national price structure will disproportionately be paid by those in London and the SE.

If they moved to a proper land tax of course the benefits would outweight this regional imbalance. But \”pay more for a more than £2 million house\” would hit swathes of Londoners and perhaps 3 people in Wales.

4 thoughts on “Vince\’s Mansion Tax”

  1. Surreptitious Evil

    Well, a trivial look at Country Life shows a reasonable number of houses for sale in Wales at £1.5m and above. I wouldn’t necessarily call them “family homes” but then I would called some of them “mansions”.

    This isn’t to disagree with your fundamental point – if it is 0.5% of owner-occupiers in Wales, it is going to be 100% of the residents of Sandbanks and a damn high %age inside the M25.

    As an anecdote – the family business bought a 2 bedroom flat just outside the M25, for somebody to stay in while they were on a 12-month customer contract. By the time that contract had ended, this flat was worth more than the combined market value of the three houses that the family members actually lived in. Despite one of those being in prime-Cambridge commuter belt.

  2. But £2m of land in Wales is worth the same as £2m of land in London. It costs the same amount to buy as well. You’re not poorer if you live in the London one than the Welsh one.

    So why does it make any difference about the location of who pays it?

  3. Are you saying that the home-owners of Fulham need protection from their unfortunate good fortune?

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