Quizzes & Puzzles14 mins ago
How Will Labour's "mansion" Tax Work?
35 Answers
Will we have civil servants knocking on doors of "mansions" demanding money with menaces? Is it an annual thing or a one off? How will they determine the value of a house? Will border line owners deliberately devalue their own houses? I think we need to know.
Answers
“Once allocated to a "mansion" band you'd stay there. No need for much more reassessment
11:55 Wed 07th Jan 2015
The threshold is set at a 'mansion' worth £2million and the tax will be 1% of the house value. Those houses worth more than £2million will therefore pay proportionally more.
80% of houses liable for the tax are in Tory Constituencies in London and the South East, so their will be minimal electoral damage.
Presumably a household will be given a banding, like the council tax, and a payment will have to be received by the Inland Revenue before a set date. Late payments will incur fines like late income tax.
About 100,000 'mansions' will be taxed, raising just over £1billion.
I might add, I do not support this restrospective tax.
80% of houses liable for the tax are in Tory Constituencies in London and the South East, so their will be minimal electoral damage.
Presumably a household will be given a banding, like the council tax, and a payment will have to be received by the Inland Revenue before a set date. Late payments will incur fines like late income tax.
About 100,000 'mansions' will be taxed, raising just over £1billion.
I might add, I do not support this restrospective tax.
The "value" of a house will be in accordance with Council Tax figures no doubt.
This attack on Labour is a bit of a damp squib, especially since the property tax principle contained within the Council Tax system was introduced by the Tory Government in 1993, and therefore all your scaremongering allegations could equally have applied then.
This attack on Labour is a bit of a damp squib, especially since the property tax principle contained within the Council Tax system was introduced by the Tory Government in 1993, and therefore all your scaremongering allegations could equally have applied then.
This is not as simple to implement as Balls and the other Labour cronies think.
Council tax bands in England were established in 1991, and properties worth more than £320k at that date were set at the highest band, Band H. All other valuations since have been estimated by referencing back to that date.
There may be an approximate correlation between Band H and £2m valuation in today's money, but property price inflation is not uniform across the country. London is a case in point, where price inflation has been higher than average, bit again, with massive variations between districts.
The original valuations were done in 1991 using drive by chartered values who were paid to do it. There was then a period when objections were heard. Are we going to have the same palava again? It will be impossible to just say, everyone in Band H, you are liable for this.
It the the Valuation Agency that manages and controls this, not local authorities, who merely use the output data.
The devil is in the detail here, and it ain't simple.
Finally there is plenty of evidence in these parts of folks being advised to offer their country mansions for sale in the range up to £2.25m at a price of £1.95m. This has been going on since the summer.
Council tax bands in England were established in 1991, and properties worth more than £320k at that date were set at the highest band, Band H. All other valuations since have been estimated by referencing back to that date.
There may be an approximate correlation between Band H and £2m valuation in today's money, but property price inflation is not uniform across the country. London is a case in point, where price inflation has been higher than average, bit again, with massive variations between districts.
The original valuations were done in 1991 using drive by chartered values who were paid to do it. There was then a period when objections were heard. Are we going to have the same palava again? It will be impossible to just say, everyone in Band H, you are liable for this.
It the the Valuation Agency that manages and controls this, not local authorities, who merely use the output data.
The devil is in the detail here, and it ain't simple.
Finally there is plenty of evidence in these parts of folks being advised to offer their country mansions for sale in the range up to £2.25m at a price of £1.95m. This has been going on since the summer.
Property values change, so the amount of tax due would have to be reviewed, probably every few years.
The formula for calculating the Council Tax was conscieved with the Conservative Shires by John Major's Government. The simpliest way to determine who pays the 'mansion' tax and how much, would be to use the same measure.
The formula for calculating the Council Tax was conscieved with the Conservative Shires by John Major's Government. The simpliest way to determine who pays the 'mansion' tax and how much, would be to use the same measure.
Here's a statistic for you, the average UK house price inflation index since 1st April 1991, using ONS's own quarterly data, shows an inflation figure of about 380% between price then and now.
That produces a start point for Band H references to today's prices of about £1.2m. (£325k x 3.8). So that suggests not all Band H houses appear to fit snuggly into the £2m plus bracket (assuming no improvements have occurred).
A wholesale reappraisal of all Band H houses is going to be required.
And that assumes average prices increase across the whole country, which is anyway nonsense.
That produces a start point for Band H references to today's prices of about £1.2m. (£325k x 3.8). So that suggests not all Band H houses appear to fit snuggly into the £2m plus bracket (assuming no improvements have occurred).
A wholesale reappraisal of all Band H houses is going to be required.
And that assumes average prices increase across the whole country, which is anyway nonsense.
“Once allocated to a "mansion" band you'd stay there. No need for much more reassessment.”
The problem is, OG, that, unlike the Council Tax principle where properties are banded, this tax will be a percentage of the property’s exact value. Assuming that the amount levied will alter with changes in the property’s value then constant re-evaulation will be necessary. Furthermore prices certainly do not “go up and down together”. There are huge differences across the country as recent figures confirm.
Leaving aside the iniquitous aspect of this tax, like many things that governments do it will probably cost more to administer than it collects. Huge armies of people will be required to run it and Town Halls up and down the country will be rubbing their hands with glee should it be enacted.
The problem is, OG, that, unlike the Council Tax principle where properties are banded, this tax will be a percentage of the property’s exact value. Assuming that the amount levied will alter with changes in the property’s value then constant re-evaulation will be necessary. Furthermore prices certainly do not “go up and down together”. There are huge differences across the country as recent figures confirm.
Leaving aside the iniquitous aspect of this tax, like many things that governments do it will probably cost more to administer than it collects. Huge armies of people will be required to run it and Town Halls up and down the country will be rubbing their hands with glee should it be enacted.
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