Mansions escape tax hit

5th December 2012

People living in big expensive houses can breathe a sigh of relief with the Chancellor of the Exchequer George Osborne ruling out a Mansion tax.

The policy is favoured by the junior coalition partner the Liberal Democrats. The party proposed the tax in its last election manifesto and more recently suggested it was the price it would extract from the Conservatives in return for agreement to more welfare cuts.

One idea for the tax, even suggested by leading Conservative MP Andy Tyrie, the chairman of the Treasury select committee, was that the Government should introduce higher council tax bands as the Telegraph reported last month.

However the Chancellor has dismissed the idea of any sort of Mansion tax in the Autumn Statement describing it as intrusive, expensive to levy and difficult to recoup. He also said it would be a temptation to future Chancellors to continue raising the tax. 

The difficulty of recouping tax is one of the themes of this year’s statement with Osborne castigating Labour for having high tax rates on the wealthy but actually receiving less revenue as a result.

However higher rate tax payers have not escaped entirely. They will be hit by other measures restricting the amount of higher rate tax relief available on a pension.

 

 

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