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Mansion tax resurfacing

We note that discussion of the wretched mansion tax is re-surfacing, having been adopted as a policy by the Labour Party. When a tax is based on some round-number threshold, it must be concluded that it is based on no sound principle. It will also lead to endless disputes from property owners who find themselves caught through being just above that threshold. At a time when property prices are volatile, this is a recipe for an administrative shambles as all the appeals have to be dealt with. One might have thought that the valuation problems were so obvious as to rule out the whole suggestion, but it has been sloshing around now for several years ever since Vincent Cable came up with the idea. There are of course two sorts of “mansion” – ordinary houses in the London area, where the land value forms a high proportion of the total property value, and actual mansions, country houses standing on land of little value. Their owners might decide to convert their West Wings into stables and invest in some horses so as to get the value below the threshold. There is an article about this aspect of the tax in the FT today.