Two million reasons not to tax houses

Monday 17 November 2014

When we moved to London from Manchester in 1996 our house, in which we still live, was worth a fraction of today's proposed entry value for Labour's mansion tax.

Now it's comfortably inside the zone and, if the levy is imposed, like millions of other home-owners in London and the South-East we'll be writing HM Treasury a large and painful cheque. Every year. As we grow older and our income inevitably declines, we may reach the tipping point where we can no longer afford to remain in the home we worked so hard to buy and maintain. It's a gloomy prospect and a depressing way to contemplate one's old age.

There - interest declared. Now to the tax itself. It has been roundly condemned by commentators from all sides, not least from within Labour itself. Former chancellor Alistair Darling thinks it's a rotten idea, and this week yet another socialist stalwart weighed in against it - Lord Winston, the Labour peer, geneticist and TV presenter.

Lord Winston (who I am reasonably certain himself lives in what his party would define as 'a mansion' - a deliberately pejorative term which in the vast majority of cases is being knowingly misapplied to what most of us would call 'a house') says the tax will have a dire effect on charities. This is because in many cases they rely on legacies, and shadow chancellor Ed Balls says that people who can't afford to pay the tax during their lifetime can do so after they've died. It'll be taken out of their estate.

So bang goes the tradition of leaving legacies to favoured charities. If you knew your children were to be largely disinherited by the tax, would you risk leaving some of what might be left to good causes? Lord Winston thinks not.

'Because people won't be able to calculate what will happen to their estate, they will start refusing one of the most important parts of charitable giving - legacy gifts,' he warns. 'Cancer Research UK relies to a HUGE extent on legacies.'

Ironic, that, considering Ed Milliband claims the tax is to raise money for the NHS.

But it's not just public health that will be impacted. Lord Winston says that there are 'a large number of charities that should be very worried about this announcement.'

Meanwhile Alistair Darling, in something of a statement of the bleeding obvious, said this week that the 'big problem with a tax that kicks in at £2m is that we will see a lot of people saying: "My house is worth £1.99m".'

Dead right there, Darling. There'll be a blizzard of appeals against Treasury valuations.

Badly thought through, badly argued, unjust, and unworkable. So even if Labour scrapes the next general election, I don't think our charity chiefs - or Lord Winston, come to that - should lose too much sleep over the mansion tax.

Because it ain't gonna happen.

Read Richard and Judy's column for the Express in full here.
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