Friday, February 15, 2013

Plans revealed for UK Mansion Tax

Feb 15, 2013 -

The leader of Britain’s opposition, Ed Milliband, has revealed plans to introduce a ‘Mansion Tax’ on homes worth more than £2 million (S$3.8 million) if his party is elected to power at the next general election.

Shadow Finance Minister Ed Balls said there are 70,000 homes in the United Kingdom worth more than £2 million. He said that nearly half were not main residences or second residences, adding that many would not be occupied and were seen as investments.

The cost of the proposed additional tax is expected to be in the region of £40,000 (S$76,654) per year for a £2 million home.

Experts have questioned whether the proposed tax would work, with some suggesting it would be both complex and inefficient to administer.

Lucian Cook, Director of Residential Research for Savills in London, said: “The high value end of the market was already making a disproportionately high contribution to the total tax take even before last year’s budget. Coming on top of the additional taxes introduced less than a year ago, talk of a mansion tax will be very unwelcome.”

He added: “Not only would such a tax be costly to administer, but our analysis suggests that it would not be a big revenue raiser.”

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