The survey cited doesn't mention the Mansion tax, so the Times points to a 'general feeling'
A spectre is haunting London – the spectre of Labour’s Mansion tax. Fears over the proposed charge on £2million homes are driving down house prices in London, despite a rise in prices in the rest of the country. The Times has the scoop: ‘Mansion tax fears depress house prices across London’.
If we leave aside for a moment whether house prices in London couldn’t do with a bit of depression, what evidence is there that ‘Mansion tax-dread’ is the cause of this drop in prices?
Well, there isn’t any – at least, not in the Times story, which cites a survey by the Royal Institution of Chartered Surveyors (RICS) for February, released today, which found a rise in house prices nationally, and a price decrease in London.
Trouble is, the survey doesn’t mention the Mansion tax, either in its sample of responses or in it’s analysis. Neither does the RISC’s press release on its website. In fact, the only link made between lower prices in London and the Labour policy is in the Times piece itself:
“London homeowners are wary about moving because of extra fees and taxes they might face from a new government in May. Labour has already promised a tax on properties worth more than £2million, and there is a general feeling that politicians will step up their efforts to tap into property wealth for money to fund public spending.”
Ah yes, a “general feeling”. No evidence is provided for this assertion, or for “wariness” among homeowners.
Of the scores of RICS members quoted in the survey, which are only a sample of the 324 responses collected, just two mention the Mansion tax, and only one of these is based in London.
And with house prices rising nationally, and Labour’s policy intended for the whole country, why is this fear of the Mansion tax only gripping London?
Besides all of that, a 28 per cent drop in the ludicrously high price of a home in London will be music to the ears of many potential buyers. A report from the charity Shelter recently found the average house price in London is now almost 15 times the average wage.
Plus the Mansion tax will only affect homes worth over £2million – less than 0.5 per cent of all homes in the country – and only when the owners earn more than £42,000 a year.
So if the Times is going to claim fears about Labour’s Mansion tax are driving down house prices in London, their evidence ought to be more than a “feeling”.
Adam Barnett is a staff writer at Left Foot Forward. Follow him on Twitter
64 Responses to “Media Watch: Times blames Mansion tax fears for London house price drop. But where’s the evidence?”
Stop the Mansion Tax
If you live in a £2.5m 4 bed semi in Hampstead and earn £43k per year you’ll need to find £5,000 a year of post-income tax earnings to pay The Mansion Tax. Let’s call that about £7,000 pre-tax or about 16% of the £43k pre-tax income. This is what Ed Miliband and Ed Balls call “Fair”.
Stop The Mansion Tax – it’s supposed to target the ‘super-rich’ but it’s ordinary middle class Londoners who’ll be paying.
Stop the Mansion Tax
Because you can’t pay taxes with bricks and mortar.
And you are not “lucky” if you have no plan to sell your house and move out of the community you live in – which is going to happen to a lot of people.
Stop the Mansion Tax
You forgot to mention that the UK has the highest property taxes in the world.
“Britons pay the highest property taxes in the developed world, according to analysis by the Organisation for Economic Co-operation and Development.
The OECD’s annual analysis of tax in top economies showed that while UK’s total tax burden as a percentage of gross domestic product fell to 32.9pc in 2013, from 33pc in 2012, property taxes continued to rise both as a share of national output and Britain’s total tax take.
Taxes on commercial and residential property – including council tax, inheritance tax and business rates – were worth 3.9pc of GDP in 2012 – the latest year for which data are available.
By comparison, property taxes account for 3.8pc in France, 2.9pc in the US and just 0.9pc of GDP in Germany.
Taxes on homes and commercial buildings now account for 11.9pc of Britain’s total tax burden, up by 0.3 percentage points compared with 2011.”
Daily Telegraph 10 Dec 14
Leon Wolfeson
So if you’re rich and you’ve managed not launder enough of your income this year, aw, there’s some tax to pay.
Your response shows why it’s important – as you paint the 0.5% as “ordinary”.
Leon Wolfeson
“but this would require a very slow and inclusive process requiring cross party consensus”
So you’re effectively saying “it won’t happen”.
No, we need to change the voting system to get some change and a chance at decent tax levels for the 1%. Like, oh, more than someone earning say 15k. For starters.
Also, no, you just need an effort like the census to revalue properties. Heck, you could do it area by area.