Welcome to the FairHomeTax Blog


Monthly Archives: NOVEMBER 2014


Saturday, November 29, 2014


Dailly Mail 29 Nov 2014 - FairHome Tax Research
The Daily Mail has given great coverage today (saturday 29th November 2014) to bringing  sense to the issue of fairer property taxation. To see their article click on the image in the blog or go to this link
To see the article above with other media coverage go to www.fairhometax.uk/MansionTaxPressCuttings.html


posted by FairHomeTax Team  29.11.14 11:59



Friday, November 28, 2014



The CEBR Review of the impact of mansion tax on the family home
Today we launch the first dispassionate and objective review of the impact of Labour's planned Annual taxation of family homes over £2m. The FairHomeTax Campaign has been launched because of the proposed new family home tax idea by the Labour party called persuasively the Mansion Tax.  In recent months many commentators, celebrities and analysts have been somewhat emotive about this tax and Labour’s idea has polarised the Nation’s opinion based on this sentiment. FairHomeTax wanted to look at the proposed new idea dispassionately, apolitically and objectively and so commissioned the CEBR (Centre for Economics and Business Research) to review the "Impact of the proposed mansion tax on family homes in the UK.

Summary of key points concerning mansion tax from the CEBR


  • The claim that more households will not be dragged into the Mansion Tax is incorrect. By 2020, we estimate 2,163 more UK households will be paying Mansion Tax, bringing the total number of homes subject to a payment to 98,755; up from 96,592 in 2016.

  •  Further, we expect that net Mansion Tax revenues will fall far short of the claimed £1.2bn per year. Reduced house prices and housing transaction activity at the higher end of the market are expected to reduce stamp duty receipts by £343 million in 2016 alone. The loss of stamp duty revenue increases with every additional year that the Mansion Tax remains in place and totals over £1.9 billion by the end of 2020.

  • As the mansion tax deters high net worth individuals from the UK, a decline in other tax revenue streams is highly likely. Top talent is likely to be deterred from staying in or moving to the UK as a result of the mansion tax, curbing income tax receipts.

  • Some low income homeowners of high-value properties, many of which are pensioners, will be unable to pay the mansion tax until they sell the property or pass away. Further, as these asset-rich cash-poor homeowners avoid moving in order not to pay the accumulated mansion tax this may have a doubly negative effect. Not only will many high-value homes be kept out of the market, but also GDP-boosting activity associated with moving houses e.g. hiring of workers, furniture purchases will be limited.

  • The Mansion Tax will un-proportionally hit London and the South East of England - 95% of homes affected in 2016 are in these areas.

  • Relatively cash-poor pensioner households are at risk of paying the mansion tax. In Inner London, it is the areas with a higher proportion of over-65s households that are most affect by the Mansion Tax. In fact, the proportion of over-65s residents in the SW3 postcode district, the area most affected by mansion tax, is 17% - nearly twice the 9% average for inner London.

  • Of the 4,736 London homes that will be dragged into the Mansion Tax between 2016 and 2020, 33% are in parliamentary constituencies represented by Labour. Labour strongholds such as Hampstead, Hackney, and Camden will be greatly affected.

  • Administrative costs associated with the implementation of a mansion tax may significantly cut into the raised revenue. Even if self-valuation is utilised other expenses, including handling potential appeals regarding bracket placements, remain. Gathering data on low income home owners exempt from mansion tax and calculating back payments owed by those homeowners upon sale of the property will also be costly.

  •  Although envisioned as a tax on wealth, the mansion tax levies the consumption of housing, more than wealth itself. For example, a landlord that owns ten flats valued between £1m-£1.5m each would pay nothing in mansion tax, while a homeowner in London that purchased his property decades ago for a modest amount becomes subject to a minimum £3,000 per annum payment. As this example illustrates, the link between wealth and value of owned property is not as direct as suggested by the proposed policy.
 


posted by FairHomeTax Team  28.11.14 22:34



Friday, November 28, 2014


From independent market research by ComRes in October and November in two different samples of 2000 representative across the UK these were key conclusions: 
 
  • On first pass Labours proposed new levy is seen as a popular tax. However, the principles and driving forces behind the proposed Mansion tax are less popular. A majority of British adults think that new forms of taxation should focus on ability to pay, not be based on property value.

  • Similarly, a majority think that the NHS needs reform, not more money provided by taxation on property. Half see it as tackling the symptom, not the underlying problem.

  • These results suggest a general preference for savings through reform, not taxation.

  • The fact that the government would have to spend time and money valuing every house in the country is both the most important and most believable disadvantage of the ‘mansion tax’. British adults are also concerned about the impact on pensioners, the potential for the threshold for the tax to drop below £2 million, and the prospect of having to pay both tax and mortgage payments.


posted by FairHomeTax Team  28.11.14 10:00



Thursday, November 13, 2014


Proposals for a "Mansion Tax” claim that it would be a targeted and efficient tax that would be paid only by the very wealthy, and that high value residential property makes an unfairly modest contribution to tax receipts. These claims are flawed. A Mansion Tax would not take account of an individual’s ability to pay that tax. It would penalise those on low incomes living in parts of Britain where property happened to have substantially increased in value during the property boom or, in the case of elderly owners, during their period of ownership. It would be very complex to administer and collect. Accurate valuations of high value individual properties (which are by definition illiquid) are difficult to establish as:
  • there is little comparable transactional evidence;
  • an individual property’s value is determined by the interaction of many different, often intangible, attributes.
  • there would also be a high likelihood of legal dispute and calls for revaluation.
The UK already has by far the highest property tax take of all OECD countries (at 4.2% of GDP compared to an average of 1.8%). High value residential properties already make a high tax contribution:
  •  their Council Tax bills are twice the national average.
  • the highest 1.6% of sales yielded £1.2 billion in stamp duty in 2010. This is equivalent to 26% of all residential stamp duty. The new upper 5% Stamp Duty band will add around £290 million a year. Tightening up evasion would add another £150 million or so a year (assuming one in 10 transactions over £1 million avoid stamp duty).
  • the top 0.7% of housing stock held at death contributes 36% of inheritance tax receipts from residential property.
It is likely that a Mansion Tax would raise, at most, £1 billion – the equivalent of 0.2% of total tax revenues. But the damage it could do could be far greater, particularly if it undermined the UK’s attraction to
international entrepreneurs and investors.


posted by FairHomeTax Team  13.11.14 15:29



Tuesday, November 4, 2014


Howard Cox Founder of the FairHomeTax Campaign

Hi, with TV broadcaster and motoring journalist Quentin Willson, I have helped stop £30bn of tax hikes at the pumps over the last 5 years through the FairFuelUK Campaign. In fact we changed Government Policy in this area, showing that cutting duty on fuel is good for GDP, jobs and inflation.
 
As a consequence of this successful campaign, I have been asked by several different interested groups and individuals to stop the Mansion Tax. As an apolitical independent I view the entire UK property taxation system as cumbersome.  I feel strongly that we should all come together to make it a fairer and more equitable system. It needs reform to generate the right level of income, not just for the NHS, but for other public services too. No one could argue with that aim, or could they?

It's important to understand why I am against Labour's Mansion Tax. Ed Ball's idea of raising more tax to help the NHS is laudable. However, Mr Osborne has "gazumped” him in his Autumn Statement and announced an extra £2bn for the NHS plus a fairer stamp duty approach. 

Labour's Mansion Tax will not work securely, or consistently, to meet their target of funding 30,000 new nurses. See why at http://www.fairhometax.uk/mansion_tax.html  Instead, by simply re-evaluating all aspects of current property taxation and to make them fairer and more progressive, this approach is the more honest option. The Tories should take note too. Anyone disagree?
 
The perceived "rich” people (and I am most certainly not one of them) already generate a huge amount of tax, investment and employment in the UK. Labour know they will not get their vote. They don't care as they are cognisant that 70% of the public agree with the Mansion Tax to fund more nurses. There is no point in ignoring Labour's emotive arguments in their left wing "politics of envy”. Their message is working north of the Watford Gap. 

What Labour doesn't get yet, is that Mansion Tax will simply not work to raise an extra £1.2bn. For example, amongst the many arguments against it, "rich” people will use skilled lawyers to avoid this taxation and make it legally impossible for it to be claimed. I have spoken with many of the 'Mansion Tax Targets' and, without fail, all would be prepared to pay more in council tax. Such a more even-handed taxation approach would bring in a wider group of home owners who would willingly (in most areas of the UK) give more in tax to help the NHS. So another tax is not needed. Why doesn't Labour and the Tories jump on this option? 
 
It's so easy to count the number of houses worth "x” and multiply this by a tax percentage take on their value. The resultant figure however, is indefinable and will be like relying on a chocolate teapot. Useless in terms of functionality and reliability! 

This ill-informed based tactic will, in fact, depress all levels of the property market and could be catastrophic on other taxes too, including those growth taxes that are generated through the housing industry, and self motivated entrepreneurs who already invest significantly in UK Ltd.
 
In common with the public, I see whingeing celebrities coming out against this tax for their own personal greed. Their input only serves to help Labour's belief that it's just the wealthy and famous who are complaining about this tax. We have to counter that belief!
 
I decided to accept the campaign challenge and to firstly get objective evidence-based explanations. Then use the findings to persuade Labour to rethink their tax raising approach. 
 
I have commissioned independent on-going economic modelling and market research companies, the CEBR and ComRes, to get a real take on the future viability of this levy. Please see the summary of their findings at http://www.fairhometax.uk/CEBR_MANSIONTAX.html with extracts published in the Daily Mail article below:
 

It's clear from these Independent professionally produced reports, Mansion Tax will most certainly not work for Labour or the NHS. 

It's time to re-think and reform all existing property taxation. Please help us to convince Labour to take this on-board and work with all Parties to raise more NHS funds using a more effective, motivational, economically stimulating and less punitive approach.
 
Please sign up, support and donate to the FairHomeTax Campaign 

Howard Cox

Founder of the FairFuelUK Campaign and the FairHomeTax Campaign



posted by FairHomeTax Team  04.11.14 18:34



Tuesday, November 4, 2014


For decade’s home owners with or without mortgages have been easy taxation targets by successive Governments.  If in doubt, to raise more taxes, certain Political Parties resort to the time honoured predictable approach of taxing family homes on the basis of value rather than the ability for the owner to pay. And even more worrying the property value banding assessments politicians base tax levies on, are completely out of date and wholy discriminatory.

Stop the Mansion TaxThe Labour Party and the Liberal Democrats want to tax areas where they feel are politically popular. They call it, for totally re-election positioning, a fairer way to obtain tax revenue from those who are perceived to be wealthy.  How wrong they are! The current taxation of the family home through Council Tax, Stamp Duty, IHT and Capital Gains is unbalanced, punitively unfair and ill-thought out. And now there is the spectre of the emotively named "Mansion" Tax.

In just 5 days, 16,000 supporters of more equitable home taxation have signed up to the FairHomeTax Campaign. They call on MPs to make family home taxation fairer and to debate this issue in Parliament now. The FairHomeTax Campaign is not fighting for lower taxes per se, but for fairer and equitable taxation for all UK Home owners. It's now time to review the whole taxation system on our family homes and to say no to Labour's Mansion Tax.


posted by FairHomeTax Team  04.11.14 15:56





RECENT ENTRIES

RECENT COMMENTS

CATEGORIES

ARCHIVE






For more details email contact@fairhometax.uk Tel: 07515421611   -  FairHomeTax, 1 Rammell Mews, Cranbrook, Kent TN17 3BQ

The Campaign for Fairer Tax on UK Homes is run by Howard Cox, the founder of the FairFuelUK Campaign.  Howard Cox is a staunch campaigner for stimulating the economy, motivating consumers and fighting unfair taxation. FairFuelUK, is the Nationally Recognised Award Winning Campaign fighting for lower petrol & diesel prices and is widely accredited with stopping £30 billion of road user taxes being levied on businesses & public in this Parliament. Without FairFuelUK prices at the pumps would be over £1.60 per litre. Its time for all Parties to recognise that the family home is not the tax cash cow for their spending aspirations. A property taxation reform is long overdue.