With a general election under six months away, the battle to win Westminster seats and the keys to Downing Street have intensified recently. One way Labour leader Ed Miliband has attempted to woo voters is by proposing a mansion tax which will raise funding for the NHS. This policy is a fundamental part of Labour’s election campaign after losing in 2010 – ending a 13-year stretch in government. Their plan to tax the rich will be divided into bands depending on property value, similar to council tax billing.
Should Labour win the election on May 7 homeowners of properties valued at £2 million and above will have to pay an additional housing tax. According to shadow chancellor Ed Balls, homes will be put into four bands with those valued between £2 million and £5 million having the lowest contributions. People in this proposed lowest band would pay £250 extra a month, equating to a yearly increase of £3,000. This extra charge could create a new demographic of financial struggles to emerge. Labour are already on the defensive, claiming that those earning less than £42,000 a year in high-value properties will be able to defer the mansion tax until there is a new homeowner.
Those with a £100 million-plus property would be charged the most in an effort to save £1.2 billion for the NHS as pledged by Labour. This comes after it was revealed that waiting times for cancer treatment doubled over the last 12 months and were the longest for six years. For this reason, Labour want to increase NHS funding as well as increasing the number of doctors, nurses, midwives and homecare workers. Preservation of public sector workers is likely to be a huge issue during the general election. This would be likely to cause further council tax increases for all, adversely affecting those on lower incomes.
The mansion tax is controversial with many believing it will be ineffective because of loopholes around payment. London Mayor Boris Johnson has criticised mansion tax for being unfair on hard-working families and thinks it is unfair on England’s capital. Experts have estimated 80 per cent of homes affected by the tax are in London and the south-east. Estate agents Savills warned that people have been discouraged from buying £2 million-plus properties across London because of the threat of mansion tax being introduced. Former England footballer Sol Campbell is so incensed by the policy he has considered joining the Conservatives and feels it could make Britain poorer as wealthy individuals choose to leave.
In contrast to Campbell and Johnson, the Liberal Democrats support mansion tax. They believe council tax is regressive and the idea of taxing the wealthy is much fairer because ordinary people will not have to pay it. According to Labour and the Liberal Democrats, 99.5 per cent of homes will be unaffected by mansion tax. Miliband wants investors from overseas to be charged more for living in their second homes.
Labour’s policy has already been divisive within the House of Commons and is certain to provoke passionate arguments during the televised debates scheduled in April. They say this will improve patient care by guaranteeing cancer patients a maximum of a seven-day wait for tests and results by 2020. People who struggle to distinguish between the two main parties can see a clear difference between Labour and Conservative politicians with months of canvassing ahead.
The implementation of mansion tax could lead to a new group in difficulty with housing payments as it is based on property value rather than the homeowner’s salary. Therefore, it could cause similar problems to council tax bills and in turn create a whole new class of financial difficulty.
Council Tax Advisors provide free and impartial advice for those in debt from council tax bills. People distressed by financial difficulties are supported by advisors who organise payment plans with councils and bailiff firms. CTA CIC offer a variety of debt solutions; combating fears of aggressive bailiffs approaching your home. Their help caused a bailiff’s licence to be revoked. This invaluable support allows clients to regain their happiness without worrying about more warnings and intimidation from bailiffs.