The Liberal Democrats are to consider the extension of their ‘mansion tax’ policy to include multiple properties. This could mean that those with second homes, holiday lets and buy-to-let properties may get tied into paying this additional tax.
Reports of the proposed plans would mean a 1% levy on those with property portfolios worth more than £2million. Business Secretary Vince Cable said that it was ‘an idea whose time has come’. However, amidst suggestions by the Mail on Sunday and Sunday Times that it may also include personal property such as jewellery, he commented further that there were parts of the initial proposal which were ‘a bit whacky.’
It is hoped it will ‘puncture the bubble in massive house prices, particularly in London and the South East at the top end of the range’, according to Cable.
The proposal was backed by Labour last week, and will be debated at the Liberal Democrat party conference in March. However, Liberal Democrat Treasury spokesman, Stephen Williams, suggested the plans could face some opposition, and that the introduction of such a policy would be ‘generally quite complex to administer.’
While it is still far from official party policy, if it was to become legislation, the number of buy to let mortgage applications could decline as professional landlords avoid increasing their portfolios significantly to not fall into the tax bracket.
