Mansion Tax Scrapped in Favour of New Council Tax Bands for the Rich
Plans for the so-called ‘mansion tax’ have been in place for a while, but now the Liberal Democrats have announced that these plans will be revised to become a higher council tax bill for homes worth more than £2 million. This switch relies somewhat on whether or not there’s another hung parliament after the general election next year, as the Lib Dems would have a much better chance of pushing these plans through if that turns out to be the case. The Treasury minister has described the proposed system as “simple, practical, deliverable and fair.”
The mansion tax could have gone through at part of the 2012 budget, but plans were blocked, and Labour has supported the tax in the past for its potential to raise about £2 billion a year. The new plan for a higher council tax bill for the richest households, then, could receive the same support as a way to secure extra revenue. Previous plans would have required a one per cent annual levy on the value of properties worth over £2 million, but now proposes a “modest additional banded levy on top of council tax for high value properties.”
There are hopes that, among other things, this will bring property taxes in London into line with those in other big cities such as New York, Paris and Frankfurt. Doing things this way will reportedly speed up the process, with the new council tax band able to come into effect soon after the election is over. It won’t affect those households with homes worth less than £2 million, either, but would simply serve to level the playing field a little between the richer and poorer UK residents.
This is particularly necessary when those households at the poorer end of the spectrum are being denied the help they previously benefitted from, with some families now paying council tax for the first time. When families are unable to pay what is demanded, it is common for arrears to build up to a point where debt creeps into every aspect of daily life. That means day-to-day worry, stress and panic about debt, and a visit from bailiffs when arrears are not paid, but there is thankfully always a way out of these sticky situations. For advice and guidance on council tax, bailiffs and other worries, please don’t hesitate to contact Council Tax Advisors.