Well, you have heard it first at the Labour Conference yesterday the somewhat ‘bumbling’ Ed Balls espousing the politically charged rhetoric that Mansion Tax will pay for the NHS. How cynical is this?
Firstly, the proponents of this tax have no idea how much revenue it will raise and this figure is pure guesswork. Secondly, I’m not sure how much more money needs to be spent on the NHS since the present government has maintained the fulsome commitments to healthcare of frontline medicine of the last ‘discredited Labour regime’ despite the vital cut-backs that needed to be done.
I have been in the estate agency business for over 40 years now, have seen out four recessions, and I can tell you that Mansion Tax, as presently proposed, will drive a ‘coach and horses’ through the higher ranges of the property market in London and the fall- out will come cascading down to the lower price ranges. Before you know it there will be a self-engineered, full blown property recession that will affect the wider reaches of the economy.
Prices may well drop by up to 50% and householders will be in the awful dilemma of wanting to sell, so as to avoid this punitive tax, but unable to do so due to massive over-supply and falling prices. This could mean that there will be far fewer transactions and revenue from Stamp Duty (SDLT) will drop markedly.
Anyone who has a brain in their heads will contest values at each threshold and the courts will be awash with litigation.
Despite the provisions for ‘cash poor widows’, allowing the tax to be deferred (plus interest) until they die, between this liability and death duties there will be precious little left to bequeath to their families. What a depressing scenario!
A reputable firm of estate agents has already cost the gains from this tax and have suggested that the proposed threshold for Mansion Tax may need to be dropped from £2million to £1million in order to supplement the tax revenue and therefore Mansion Tax will morph into a ‘Home Tax’ before too long.
Potential Labour supporters who are very excited about the prospect of ‘kicking the rich’ will find the waves of this daft proposal lapping at their own doorsteps if there is a full blown property recession and people go into negative equity.
Presently, there are many stable loans that will turn into negative equity if the foregoing scenario takes place. This will worry the lending institutions, even more so than they are at present, and mortgage valuers will start slashing valuations mercilessly.
We all know why the socialists are propagating Mansion Tax and as a ‘double whammy’ they are linking it to the NHS, but to put the economy under threat is a heinous crime and is a further demonstration of the adage ‘why would you give the keys of the British economy to the people who crashed it last time?’
I rest my case.