Mansion tax motion defeated

Wednesday, 13th March, 2013

An opposition motion for the introduction of a mansion tax on expensive UK properties has been defeated in the House of Commons.

Labour MPs tabled an opposition day motion for a levy on properties valued at more than £2m in the House of Commons.

Shadow Treasury minister Chris Leslie opened the motion for Labour which was defeated by 304 votes to 241.

Business Secretary Vince Cable told BBC Radio 4 on Monday the Lib Dems would not side with Labour in the vote. The party instead tabled an amendment which recognised the party’s support for a mansion tax without voting for the Labour proposal.

The outcome of the non-binding vote is consistent with the Conservatives’ position on the introduction of a mansion tax which it has repeatedly opposed.

Although it was Labour who proposed the tax, Leslie was unable to guarantee it would appear in the party manifesto at the next general election. He said the party could not know what “other horrors” will appear either the Budget or the spending review in June in order to give a definitive position ahead of the election.

Labour MP Karen Buck noted that 60% of high value properties go to overseas buyers and stressed the importance of protecting those who are income poor but asset rich. Leslie said a mansion tax could be put together with protections for more vulnerable homeowners ensured.

Treasury minister David Gauke shared the same concern that a third of houses in London which are worth more than £2m have been in the same family for 10 years, meaning asset rich, income poor owners could be at risk.

Gauke also noted it was this current administration which had raised stamp duty from 5% to 7% on homes worth more than £2m and introduced a 15% stamp duty tax rate for those same properties residential properties purchased through a corporate structure.

Prime Minister David Cameron ruled out the introduction of a mansion tax in October, who promised separate measures to ensure high earners pay more.

Chancellor George Osborne further confirmed there would be no mansion tax as part of the Autumn Statement in December. He told the House of Commons such a tax would be “expensive”, “intrusive”, difficult to recoup and would tempt future Governments to expand the number of properties that would be caught by the tax.

Labour party leader Ed Miliband proposed the introduction of a mansion tax in a speech last month, which he said a Labour government would use to fund the reintroduction of a 10p rate of tax.

The Lib Dems drew up proposals for a mansion “super tax” in February, which is designed to be extended to cover multiple properties, including second homes and buy-to-let properties, worth a total of over £2m.

Today was an Opposition Day which is allocated in the House of Commons in each session for the discussion of subjects chosen by the Opposition. Seventeen days are at the disposal of the leader of the largest opposition party to decide which topics are debated.

Complete Mortgages are experts in the large loans market – please contact our Guildford head office on 01483 233014 for a consultation and we will research our whole of market panel, which includes a number of non-high street specialist lenders.