Here’s a new party game for you. Let’s call it ‘Spot the Mansion’. You open the links below and look at the houses. Then (trying please not to look at the sales prices), you guess which the Lib Dems think is a mansion and which they think is an ordinary person’s house.
As you have probably guessed by now, all the odd numbers are mansions and all the even numbers are not mansions (ie, the nice houses in which you might aspire to live, but are so expensive to keep up that you have to be rich to own them). It makes the idea of a mansion tax seem a bit silly, doesn’t it?
That’s particularly the case if you marry the idea of taxing apparently high-end property with whopping rises in stamp duty, as today’s papers suggest is about to happen again with the data emerging from the London market at the moment.
In the third quarter of this year, transactions fell by 9% in prime central London to a mere 5,226. But look at Greater London, and in particular at the £2m-£5m sector, and you can see just how the effects of the new tax legislation are beginning to bite (these put stamp duty up to 7% for people and 15% for companies on property valued at over £2m). Transactions are down 53%.
Yes, you read that right. 53%. Regular readers will know that we aren’t against changes to the property tax regime – we’d swap the lot for a location tax or for a capital gains charge on first homes. But we can’t really see the good in going about it like this.
Stamp duty is a terrible tax for all the reasons I mention here, but the main problem with it is the way in which it freezes transactions and cripples labour mobility. We need less of it, not more of it.
PS – I can’t write it all again, so as the whole idea of a wealth tax on property won’t go away, here is my last blog on it: A wealth tax on the value of property is a bad idea. And the one before that: Will the wealth tax never die?