The Conservative party has said it would scrap the proposed “mansion tax” on properties over £2 million and streamline red tape to reduce the cost of building new homes if elected to government.
Speaking at the party’s annual conference in Birmingham shadow chancellor Andrew Griffith said red tape was adding significant costs to building new homes, citing the Community Infrastructure Levy (CIL), the Future Homes Standard, and section 106 agreements as examples of regulations adding costs to house building. The party said it estimated it could reduce the cost of building new homes by £50,000 per property. A recent report by the Home Builders Federation estimated increases in taxes and the cost of policies introduced by successive governments have added an extra £76,000 to the cost of delivering every new home.
On the mansion tax Griffiths said Labour’s Andy Burnham was “recruiting an army of snoopers….to spy on citizens to see if you’ve a particularly well-kept garden.” He added “They (Labour) pretend it’s a mansion tax but it will hit people here in Birmingham, in Manchester and those living in ordinary homes making long commutes to our capital city. For many, it will be simply unaffordable, they may have bought their home decades ago, be retired, be on a fixed income, £75,000 over ten years. Where is a widow supposed to get that sort of money? They don’t care.”
Saying the party would cut one tax each year, the shadow chancellor added “lower, simpler and fairer taxes” would be his “north star” if elected.
Conservative party leader Kemi Badenoch is expected to announce the party’s position on Inheritance Tax in her speech on Wednesday after saying scrapping the tax would be “morally right”, but any commitments would have to be “fiscally responsible.”
Mansion Tax
From 2028, an annual ‘high value council tax surcharge’ of £2,500 for properties worth between £2-5 million and £7,500 for properties worth over £5 million will be collected through the council tax system. The changes will affect less than 1% of properties and are set to raise over £400 million by 2031.
The first stage of the process will be to identify properties which correspond to the four thresholds and charging brackets: £2m-£2.5m (HVCTS: £2,500), £3.5m-£3.5m (HVCTS: £3,500), £3.5m – £5m (HVCTS: £5,000) and over £5m (HVCTS £7,500). Charges will be updated annually in line with consumer price inflation.
The Valuation Office (VO), part of HMRC, will be responsible for valuing properties using combining automated valuation models with “professional valuer judgement”, the criteria for which includes the sales prices of similar properties, adjusting for differences (property type, size, age, number of rooms and parking); the same used as is used for council tax.
Revaluations will be conducted by the VO every five years, with the following revaluation taking place in 2033.
