Lib Dems target middle England with £1m property tax

By Alex Stevenson

Properties worth over £1 million will face a 0.5 per cent annual levy under controversial Liberal Democrat proposals outlined today.

As the party bids to shift the tax burden towards the wealthiest in Britain, Treasury spokesman Vince Cable used his keynote speech to the party’s autumn conference in Bournemouth to announce the divisive policy.

“We have seen the super-rich pouring their money not into job creating businesses but into acquiring mansions,” he said.

“And remember too that under our unfair council tax Messrs Mittal and Abramovich in their £30 million palaces pay the same as a band H family home though their properties may be worth 40 or 50 times as much. That small levy alone would lift 300,000 low paid workers and pensioners out of tax.”

Under the proposals the 0.5 per cent would not be levied on the initial £1 million – meaning a property worth £1,000,100 would be charged 0.5 per cent on the extra £100 only.

The levy would be imposed once a year, rather than on the occasion of the property’s sale.

“The bottom line is people who live in multimillion-pound houses are people who have accumulated significant amounts of wealth,” Nick Clegg’s chief of staff Danny Alexander explained to journalists this morning.

There are already concerns about the details of the policy. Questions remain unanswered about its impact on pricing and regional bias against London and the south-east.

The proposal comes as part of a wider series of measures designed to place the brunt of the “progressive austerity” agenda championed by Mr Clegg on those with lower incomes.

Mr Cable announced four million people will no longer be required to pay income tax under Lib Dem proposals to raise the lower threshold to £10,000.