Monday, 21 September 2009

Lib Dem Mansion Tax proposal is barmy

We are well and truly in the party conference season now and no doubt as usual all the parties will put forward eye catching but ill conceived and totally impractical policy proposals. At the moment it is the turn of the Lib Dems and Vince Cable has produced an idea that has agitated more than a few bloggers, including me it has to be said. What is being dubbed as a "Mansion Tax" would see those with properties worth more than £1 million pay a tax of 0.5% on that part of the value in excess of this one million figure. Well intentioned Cable may be in trying to rob the rich to pay the poor but his idea is a nonsense in many ways. He has talked about using Land Registry figures in initially assessing where these £1 million plus properties are because of course the LR will have records of the sale prices. But taking the parish I live in for example there are few houses in this price bracket and the ones that are don't regularly come on to the market. One and two bedroom terrace cottages, three and four bedroom houses - yes we have plenty of those so price valuations are (relatively) simple but the 'mansions' Vince Cable is targetting are much harder to realistically price and the whole valuation exercise will be a bureaucratic nonsense I believe.

Another point - and I've not noticed anyone mentioning it yet - is the situation where someone inherits a very large but run down property with acres and acres of land that needs mega amounts of money (and it could be millions) to get the house up to scratch. Yes the whole property by virtue of size and location may be deemed as being well in excess of the one million figure in value but this might be a classic instance of "asset rich and cash poor" - I think that is the expression. There are stately piles around in which the owners find it almost impossible to renovate and maintain, no fault of their own and The National Trust can't take them all over, that's for sure.

No Vince, this is an ill conceived idea. You need to go back to the drawing board I'm afraid.

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