Mansion Tax to Cost GBP 36 000 PA

Mansion Tax to Cost £36,000 PA.

If the proposed mansion tax was introduced it would apply to 55,000 properties worth £2m according to the Treasury.

The scheme was analysed by Whitehall and found that if the tax was introduced it could raise up to £2bn pa.

The tax which both Labour and Liberal Democrats support would give high rate home owners a tax bill of between £30,000 and £36,000. These plans were originally drawn up by the Lib Dems and supported by Labour, but opposed by the Tories.

Our View

The wealthy will be squeezed.  But we suspect it is also to target wealthy non-residents owning expensive property in the UK as well as those that wrap up property inside company structures.

This is the UK's first wealth tax.  Many european nations already have yearly wealth taxes.  We expect the mansion tax, just like the Inheritance tax threshold to remain frozen or increase slower than the rate of inflation so that more properties fall into the mansion tax bracket over time thus raisng more tax revenue.