Labour in pledge on ‘mansion tax’

Published: Tuesday 23rd December 2014 by The News Editor

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Owners of properties worth more than £2 million face paying a “mansion tax” in the next financial year if Labour wins the general election, Ed Balls has said.

The Shadow Chancellor revealed he plans to impose the extra levy in 2015/16, even though the 12-month period begins before the poll has taken place.

Action to introduce the tax would start on “day one” of a Labour government and the Treasury has already been asked to speed ahead with preparations in the run-up to the election, he told the Independent.

Mr Balls pointed to a £5 billion windfall tax on privatised utilities imposed seven months after Tony Blair swept to power.

He told the newspaper: “A charge is paid in that [financial] year on the valuation on a date in that year. We will be clear what we are going to do in our manifesto. No one will have any doubt about our intentions.”

The money raised through the tax would be ploughed into the NHS, Labour has said.

“Saving the NHS will be at the heart of our first Budget,” he said. “I would like to see that revenue coming in in the first year of a Labour government, before the end of the financial year. We will have to see the practicalities.”

Owners of properties worth between £2-3 million would pay an extra £3,000 a year under the plans, but ”asset-rich cash-poor” home owners will be able to defer their bills until they sell or pass on their property.

Senior Labour figures have raised fears about the proposals and pop star Myleene Klass attacked Labour leader Ed Miliband over the policy, claiming it would hit ”little grannies” whose homes had increased in value over decades, rather than the super rich.

The party has insisted that ”modest properties” would not be caught up in the tax and the threshold for paying the charge would rise in line with house prices, rather than inflation, so the number of homes affected did not increase.

Mr Balls told the Independent: “I am sure that the Treasury will be gearing up to make sure we can deliver this.

“As a backstop, we will legislate for the mansion tax to start in the following financial year, 2016-17.”

Published: Tuesday 23rd December 2014 by The News Editor

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