Tuesday, 21 October 2014

Killer Arguments Against LVT, Not (343)

Neither of these are new, particularly correct or even relevant to the debate, but it's nice to see two completely contradicatory KLN's being wheeled out in the same article in The Telegraph:

Many politicians are concerned that an influx of foreign investment is leaving the capital’s leafier streets less diverse, with more oligarchs and fewer British families. But a mansion tax would – by definition - make certain expensive neighbourhoods even more expensive.

Nick Paget-Brown, the leader of Kensington and Chelsea council which has the highest concentration of £2 million+ homes, said the levy would force long-term residents to move out “making way, no doubt, for some real billionaires”.


Levying a charge of £3,000 a year on homes worth £2-3 million will raise £140 million, according to Savills. That leaves Labour seeking to raise £1.08 billion from a remaining 57,000 properties worth over £3 million, paying an average of £19,000. It means that the bulk of the revenue is balanced on a relatively small number of mobile people.

Firstly, the tax would not make buying a home in these areas more expensive as the very modest tax comes off the price.

Secondly, can these Homeys make up their minds whether we'd end up with more oligarchs or fewer oligarchs? And then please explain which of these is more desirable and why?

I suspect we'd end up with more oligarchs in the expensive areas, but on balance that's a good thing; they're happily paying a bit more tax plus spending loads of money here, which is good for the UK's balance of payments.

If and when I'm retired, I'd rather live on a street with normal families than be surrounded by mansions which are vacant most of the time, so if normal families downsize to a normal area (with a million quid unearned, untaxed cash to spend), that must surely be A Good Thing.


mombers said...

"Accountants are already considering how the tax could be avoided. One measure could involve breaking up one property into two legal entities – easily done if a house has a basement"
Well, you be stung with a second council tax bill in this case, making the £3k saving much less attractive... And of course if it's two legal entities, both are subject to ATED

mombers said...

"It means that the bulk of the revenue is balanced on a relatively small number of mobile people"
No, it means the bulk of the revenue is from a relatively small number of immobile properties, and ATED has shown that there is plenty appetite for people to pay hundreds of grand a year for the best spots.

James Higham said...

happily paying a bit more tax


Mark Wadsworth said...

M, not just the ATED, the £50,000 per person per year non-com charge, which thousands of them happily pay.

JH, yes, happily.

LVT is ground rent, if you want to live somewhere nice, you pay it, the same as paying for a nice holiday, or private school fees or a fancy yacht.

That's quite different to having half your earned income nicked in PAYE and VAT, you get nothing back for that.