Posts with tag: labour’s mansion tax

120,000 Will Have to Revalue Their Homes Under Mansion Tax

Published On: April 20, 2015 at 3:09 pm

Tags: GE2015,general election,labour's mansion tax,mansion tax,mansion tax criticism

Homeowners hit by the proposed mansion tax will have to spend £110m revaluing their properties, according to Savills estate agents.

Labour’s plans will require over 120,000 homeowners to have their homes valued, which could cost up to £4,800 each.

Savills says that homeowners will have to pay the total cost of £110m or risk fines of thousands of pounds.

The estate agent also noted that taxpayers will suffer as HM Revenue & Customs (HMRC) will have to pay the £65m cost of disputing any valuations.

120,000 Will Have to Revalue Their Homes Under Mansion Tax

Savills have raised concerns that the cost of revaluing and disputing will probably be higher than the amount raised from the tax.

Research conducted by Savills indicates that more than a third of the 97,000 properties worth between £2m and £3m subject to the charge have been owned for over ten years. 18,700 have been lived in for over 20 years and 10,400 for over 30 years.¹

Critics claim that many hit by the tax in the South East will be on low incomes that do not correspond to the huge price rises their properties have experienced recently.

The new chairman of Tesco, John Allan, said that the tax is “penal” and “difficult to justify.”¹

Director of Residential Research at Savills, Lucian Cook, says: “The valuation requirements and associated potential for dispute mean that a mansion tax would be particularly costly and complicated to administer, reducing its efficiency as a revenue raiser for the Treasury.

“The potential costs borne by the tax payer will be a further concern to long-term owners who are often asset rich but cash poor and for whom the tax itself is a significant concern.”¹

Labour claims that taxing properties worth over £2m could raise £1.3 billion for the NHS from about 100,000 homes.

It announced proposals to charge £3,000 a year on homes between £2m and £3m. It is also planning higher taxes on properties worth more, but has not disclosed how much. Estate agents estimate the average cost to be £12,000 per year.

Ed Balls has claimed that the charge to homeowners with properties worth over £10m could be tens of thousands of pounds, increasing to more than £1m for the most expensive homes.

Savills have compiled their research based on the following six bands: £2m-£3m, £3m-£5m, £5m-£10m, £10m-£15m, £15m-£20, and £20m and over.

Most of the valuations will be for homes worth between £2m-£5m at a cost of £1,800 each. For the more expensive properties, it could cost £4,800.

Savills believes that HMRC will want to contest some valuations by using a district valuer, which could cost the taxpayer £38m. Further disputes could coast £27m.

¹http://www.telegraph.co.uk/news/politics/ed-miliband/11548295/Ed-Milibands-mansion-tax-will-force-120000-to-revalue-their-homes.html

400,000 Homes are Worth £1m or More Due to Spiralling Prices

Published On: February 2, 2015 at 11:14 am

Author: Em Morley

Categories: Property News

Tags: house price growth,labour's mansion tax

Last year, 160 families saw their property’s value rise to £1m or more due to mounting house prices in the UK.

There are now 400,000 homeowners whose houses are worth £1m or more, as the combined value of homes is worth £836 billion.¹

Experts predict that this rate will continue to rise to around 200 per day this year. However, lots of these families are still cash-poor due to their wealth being invested in their pricey property.

400,000 Homes are Worth £1m or More Due to Spiralling Prices

In 2014, three times the number of seven-figure costing homes sold than a decade ago, revealed Savills estate agents and the Sunday Times.¹

In Britain, there are over 10,600 streets with an average property price of at least £1m. On 12 streets in London, you cannot buy even just a garage for less than that.¹

In the most expensive area, Kensington Palace Gardens, the average house price is £42.7m.¹ In London, there are more properties worth over £1m than the whole of the UK combined. However there are areas where there are many property millionaires, such as Cornwall, Cheshire, Edinburgh, and Suffolk.

The Sunday Times’ report of Land Registry and local authority figures found that seven-figure property sales has increased up to eight-fold in some parts since the 2007 property boom.¹

Property sales worth at least £1m in Cambridge rose 200% since before the recession. In Hackney, and Lewisham, this figure increased by 814% and 275% correspondingly.¹

There are around 275,000 properties worth £1m or more in London and 72,100 in the South East. Seven-year house sales in the East of England and the South West have risen 35% and 17% respectively since 2006-07. This is believed to have been caused by Londoners selling their £1m homes and buying mortgage-free in the countryside.¹

Property experts think that most of those owning £1m or more homes do so by accident. These houses would have been reasonably priced ten or 20 years ago, and the value has spiralled in the last few years. Concerns are building that these homeowners will be unfairly affected by Labour’s planned mansion tax, which would see those with properties worth more than £2m paying £250 a month.

¹http://www.dailymail.co.uk/news/article-2935393/The-rise-Britain-s-homillionaires-Property-price-boom-means-extra-400-000-properties-worth-1m-more.html

Demand for £1m a Year Rental Properties as Concerns Grow over Election

Published On: January 27, 2015 at 9:09 am

Author: Em Morley

Categories: Property News

Tags: labour's mansion tax,prime property

Homes costing £1m per year to rent are experiencing growing demand as those wealthy enough to live in prime properties are worried about mansion tax and Stamp Duty.

Two large penthouses were rented in Mayfair, London in 2010, and since, the £1m rental market has seen a boost.

This select sector has since expanded over the capital and into areas such as Knightsbridge, Chelsea, South Kensington, Notting Hill, Regent’s Park, and Holland Park.

In London’s uber-prime lettings industry, the average weekly rent is now £3,500 per week or £182,000 a year. This is a 23% increase on five years ago, and is more than the average house price in England and Wales.¹

Around Central London, the rental sector has had the highest rate of growth for over three years. The average rent paid in the third quarter (Q3) of 2014 was 6.5% more than the previous year.¹

It is also believed that the amount of people looking to rent these luxury properties, rather than buy them, could rise even higher. Wealthy Londoners are moving into the rental sector due to a lack of high-end homes and worries over the general election, says a report from Beauchamp Estates and Dataloft.

Managing Director of Beauchamp, Gary Hersham, currently has a six-bedroom mansion on offer, situated next door to the Qatari Royal Family on Cornwall Terrace, overlooking Regent’s Park and known as the most expensive terrace in the world.

This 8,883 square-foot mansion can be let for £960,000 per year and a £260,000 deposit. Beauchamp are also offering a five-bedroom home in Knightsbridge for £768,000 a year with a £85,000 deposit.

Demand for £1m a Year Rental Properties as Concerns Grow over Election

Hersham says: “Concerns over a change of government, the mansion tax debate and now Stamp Duty changes have led high net worth individuals to decide to rent for the next 12 months and delay purchase plans. This might cost a client up to £1m, but this is less than a £25-£100m outlay for an ultra-prime property.

“Whilst the ultra-prime lettings market has boomed during 2014, the equivalent sales sector has been affected by the uncertainty in the market caused by the pending general election and the issues over the mansion tax.”¹

Another agency, Rokstone Properties, has a Mayfair home to let for £576,000 per year. Found on Audley Street, Westminster, the property has eight bedrooms.

Managing Director of Rokstone, Becky Fatemi, explains: “Prime Central London’s ultra-prime lettings market, properties for rent for over £20,000 per month or more, has only truly emerged over the last 12 months and has really taken off over the last four months.

“Traditionally, clients owning luxury residences in projects such as One Hyde Park, The Knightsbridge, 10 Soho Square, and Trevor Square would not have chosen or needed to rent, preferring to leave their properties empty, enabling them to effectively remain brand new.

“The tenants are celebrities, overseas royals, corporate rents and people looking to buy but deciding to wait until after the election.

“Currently, lettings demand is exceeding lettings supply and the number of sales instructions on the market is also down. This is resulting in lettings values going up, and also sales values going up as there are simply not enough properties in either sector available to meet demand at present.”¹

Russell Simpson estate agents is offering The Court House in Chelsea for £600,000 a year.

Head of lettings at the firm, Lottie Henniker-Major, says there is a dip in available properties, which is causing a rise in prices: “There is a distinct shortage of stock in the upper end of the market, with no new properties having come on to the market in the £7,000 per week plus price bracket in 2015 so far. I can only predict that this will lead to a further increase in rental prices moving forward.”¹

¹http://www.dailymail.co.uk/femail/article-2926828/Inside-London-s-opulent-rental-properties-1million-cover-YEAR-s-rent.html

MPs Discuss Labour’s Mansion Tax

Published On: January 20, 2015 at 3:22 pm

Author: Em Morley

Categories: Property News

Tags: general election proposals,labour's mansion tax,property tax

Ed Miliband’s mansion tax plans have been in turmoil after Labour revealed homeowners will have to wait until after the general election to determine how much they would be charged.

Senior members of the party publicly challenged each other over the policy, as concerns grew over how much the tax would raise for the NHS.

Yesterday, Ed Balls denied accusations by Lord Mandelson that people would be “clobbered” by the tax on properties worth more than £2m. However, the shadow chancellor did not reveal how much people living in the most expensive homes would have to pay.

As the party divided over the issue, Labour MPs said the tax would “not begin to pay for” the thousands of nurses they claim they will fund.

Mr Balls criticised Lord Mandelson after he called the proposals “crude” and “short-term”. Lord Mandelson says that he prefers the Liberal Democrats’ plans to introduce more council tax bands, which he claimed would be better than “just sort of clobbering people with a rather sort of crude short-term mansion tax.”¹

Mr Balls responded, saying he “did not want to clobber anyone”, but did not divulge how much people living in the highest value properties would be charged, until after the election.

For homeowners in properties worth between £2m-£3m, they will receive an annual bill of £3,000, regardless of their income, Mr Balls said last year.

Mr Balls said for homes over £3m, the tax costs will be kept secret until his first Budget if Labour wins.

He said on BBC Radio 4’s World at One: “I promise you that it won’t be crude. I don’t want to clobber anyone, but I want to make sure that people who are paying too little tax because they are under-taxed in multi-million pound properties, and many of these are foreign owners who don’t pay tax at all, pay their fair share to the NHS.

“We are the only party setting out how we will get what the NHS desperately needs; more money for the doctors and nurses we need to deal with the crisis. We are the only party setting out a fair way to do that.

MPs Discuss Labour’s Mansion Tax

“We think that when you have properties over £2m, where they are under-taxed compared to most people’s property, it’s fair to ask people with the broadest shoulders to pay some more.

“We are going to do this in a way which will only apply to less than 0.5% of households. It will be done in a fair way. It will be done in a banded way. People above £3m will pay more than £250 a month. It will be progressive, so the higher the bands are, the more you will pay.

“I’ve not set out the details for the higher bands, because that depends upon the detail of distribution of house prices, which is something we need to go through with the Treasury in detail. I will announce for our first Budget the details of our mansion tax.”¹

Lord Mandelson said, on the BBC’s Newsnight: “We don’t have an efficient way of taxing property in Britain. I don’t happen to think the mansion tax is the right policy response to that, I think it’s crude.

“I think it’s short-termist, what we need is what I think the Liberal Democrats are proposing, and that is the introduction of further bands that relate to different values of property within the council tax system.

“That’s what I would like to see. It will take longer to introduce, that’s true, but it will be more effective and efficient in the long-term than just sort of clobbering people with a rather sort of crude short-term mansion tax.”¹

Labour predicts that the tax would affect less than 0.5% of homes in the country, and those earning less than £42,000 would be able to defer paying the tax until their property is sold.

Mr Miliband revealed that his proposal would raise £1.2 billion annually for the NHS. Labour would use this funding for 20,000 more nurses, 8,000 more GPs, 5,000 more home care workers and 3,000 more midwives.

However, former shadow health minister Diane Abbott says: “The revenue from the mansion tax won’t begin to pay for all those nurses.

“It’s not going to help. It’s not going to help Labour parliamentary candidates in London. I’ve had parliamentary candidates in the outer suburbs say to me the mansion tax is a problem for them. It’s not help in London.”¹

Tory MP for Croydon Central, Gavin Barwell, says: “The cat’s out of the bag. Labour’s homes tax is a shambles that won’t begin to raise the money Labour claim, leaving another gaping hole in their spending plans.”¹

¹http://www.dailymail.co.uk/news/article-2919140/Chaos-Labour-s-plans-mansion-tax-Party-says-homeowners-wait-Election-pay.html