An independent report commissioned by Westminster City Council has called for the introduction of “at least three additional Council Tax Bands, covering properties valued, in today’s prices, at £2million-£5 million, £5 million- £15 million and £15 million plus”.
The report, from Ramidus Consulting Limited on the ‘Prime Residential Market in Westminster’, was published earlier this year (http://transact.westminster.gov.uk/docstores/publications_store/news/prime_residential_research_report_140722.pdf)
Labour’s plans for a Mansion Tax follow this common-sense approach;
1. The threshold of the Mansion Tax will rise in line with the average rise in prices of high-value properties over £2 million. As a result, more modest properties will not be brought into the scope of the tax.
2. The tax will be administratively simple. A banded system means valuations will not be needed for most properties as it will be clear which band — for example £2 million-£3 million — the property falls into. As with the Government’s new tax on properties bought through companies, owners will be able to submit a self-valuation to HMRC.
3. The tax will be progressive. We will ensure those owning properties worth £2 million-£3 million will only pay an extra £250 a month through this new tax — the same as the average top band of council tax.
4. We will protect those Londoners who are asset-rich but cash-poor. Long-standing residents who now find themselves living in high-value homes but do not have an income high enough to pay the higher or top rate of income tax will be guaranteed the right to defer the charge until their property changes hands.
Information from Westminster City Council has revealed that there are only 61 H-Band Council Tax payers currently receiving Council Tax Benefit, indicating that the number of “asset-rich but cash-poor” residents may not be as great as some believe.