Enness Private Clients dismiss ‘Mansion Tax’ proposals
By Bridging Loan Directory -
Enness Private Clients, the large mortgage and high net worth specialist, has today (9th March 2012) dismissed the potential introduction of a ‘Mansion Tax’ on properties worth over £2 million in this month’s Budget.
Liberal Democrat Business Secretary Vince Cable recently floated the Mansion Tax idea as a possible replacement for the 50p top rate of tax levied on incomes over £150,000, but the suggestion has been met with opposition both publicly and politically.
Enness Private Clients believes the proposals are not only grossly unfair, but completely impractical and it has pointed out a number of complexities that would make any such levy unworkable.
Hugh Wade-Jones, Director of Enness Private Clients, commented:
“There are a huge number of potential sticking points for any ‘Mansion Tax’ introduction and in our belief it is likely to do more harm than good given the significant amount of cost that will be incurred in setting up such a scheme.
“One such problem is how the Government intends to value hundreds of thousands of homes and who is going to do it? Not forgetting that anyone owning a property around the threshold will claim to be under the mark and there will be nothing to stop people presenting their home in an undesirable way to reduce its value. We should also remember that value is subjective until a property is sold.
“A large portion of properties that fall into the £2m-plus bracket are owned by trust and company structures anyway, so how is the Government going to establish exactly who is liable for the tax and how will they enforce it for companies that are offshore and not subject to UK tax law? In addition, how will they gain access to homes that are empty or those owned by foreign owners who only spend a few weeks a year in the property?
“Given that property prices have doubled every decade for more than a generation, taxing those that may have a valuable home but little or no income is, quite frankly, nonsense. Like Stamp Duty the likelihood of the threshold being increased in line with house price inflation is extremely unlikely so in years to come this won’t just affect the wealthy, but will in effect be a tax on growing number within the country which is unlikely to be as popular as the current round of ‘wealth bashing’ appears to be.
“Ultimately, the cost of setting up and maintaining such a levy would be astronomical and, in effect, it is trying to suppress one of the few positive areas of economic activity currently. We would be vehemently opposed to the introduction of any such tax and the Government needs to get away from a destructive mindset of taxing wealth and its creators if we are to stand any chance of economic growth.”
For further information on Enness Private Clients please visit: www.ennessprivate.co.uk