Mansion tax plan is foiled by Pickles

First Published by: Mail Online

The Rich just get Richer: 

Communities Secretary 'deletes' property data

Schemes for a ‘mansion tax’ have been torpedoed by Eric Pickles after he effectively deleted a database compiled by Council Tax spies containing details of millions of homes. The move means that any levy on properties worth more than £2million would now take years to introduce.

Liberal Democrat ministers have told their Conservative coalition partners that a mansion tax – or an equivalent tax on unearned wealth – must be introduced before they agree to scrap the 50p top rate of income tax.

But it has emerged that the Communities Secretary has scrapped the database of property details that would have been used to calculate who would have to pay.

Officials say it would take three years to conduct a new nationwide survey of property values. A Lib Dem policy paper on the mansion tax explained that the party would use information from the Valuation Office Agency, the Government’s council tax inspectors, to implement the charge.

Inspectors at the VOA had logged details of the number of bedrooms and bathrooms of all 25million homes in England and Wales. Other information included whether homes had swimming pools, conservatories or sea views.

The data, which would be crucial for deciding who should pay a mansion tax, had been entered into a complex database – but Mr Pickles ruled out using it for a Council Tax revaluation until at least 2015.

A revaluation in Wales in 2005 saw four times as many households moving up a band as moving down, and Labour postponed plans for a revaluation in England that same year amid mounting anger over the potential for big tax rises hitting middle-class families whose homes had risen in value over the past 20 years.

Despite this, inspectors carried on logging details of people’s properties, prompting accusations that they were preparing for a revaluation by stealth. However, the most recent accounts from the VOA show that, following budget cuts, its database has been scrapped as maintaining the U.S. technology would be too costly.

Demand: The Lib Dems have said that a mansion tax must be introduced before they agree to scrap the 50p top rate of income tax.

Most Tory MPs argue that: 

New property taxes would hit ordinary families and pensioners who have worked hard and paid their share. It would, they warn, penalise those with large mortgages who are not otherwise capital-rich, as well as pensioners on modest incomes living in long-held family homes and professionals who live in large shared houses in London.

Some Tories fear that the Lib Dems are agitating for a mansion tax safe in the knowledge that the Conservatives will not agree to one – allowing them to paint their coalition partners as ‘friends of the rich’ at a time of austerity.

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