Lib Dems morph mansions tax to end 50p rate

By staff

The Liberal Democrats’ proposals to make those living in expensive houses pay more will be followed through, Nick Clegg has said.

The party’s leadership had toyed with the idea of a ‘mansions’ tax during their 2008 autumn conference.

Their proposal to impose a one per cent tax on properties worth over £2 milllion was dropped after a negative reaction from the party’s grassroots.

Earlier this month business secretary Vince Cable suggested something similar was a possibility once more, however.

Today Mr Clegg went further, explaining that high-end properties would be taxed to help fund the retreat from the 50p income tax rate.

“As well as reviewing revenues from the 50p tax rate, we will also be redoubling our efforts to find ways of ensuring that owners of high-value property cannot avoid paying their fair share,” the deputy prime minister told the Financial Times newspaper.

The precise way in which this takes place is not yet clear. “It could be a range of things: the way the council tax system is structured; the way stamp duty is structured,” Mr Clegg added.

The coalition government’s rhetoric against expensive homes will have to take into account tax avoidance issues, for many properties are purchased by companies seeking to avoid stamp duty rates.

Mr Cable told the Guardian newspaper before the Budget: “There is a very strong argument. that you need to have a proper base for taxing property and I’m sure that’s one of the things we’re going to have to look at as we change away from these very high marginal rates.

“Within the coalition, what certainly I and my Liberal Democrat colleagues will want to see is a very strong commitment of fairness in taxation.

“And that means lifting low earners out of tax which is what we have done in this Budget for the second year in succession, but also making sure that the people who are very wealthy and very privileged do pay their share.”