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Property industry lashes out at Miliband’s new mansion tax proposal

The British Property Federation (BPF) has warned that the new ‘mansion tax’ proposal from Ed Miliband would “simply abdicate responsibility for necessary council tax reform”.

Miliband announced the mansion tax on homes valued over £2m in his keynote address today at the Labour party conference. The tax is to help finance his new “time to care” fund that would see the NHS get 20,000 more nurses, 8,000 more GPs and 3,000 more midwives.

However the BPF say that the £1.7bn that a mansion tax is projected to make will have a minimal impact on NHS budgets.  They also claim that it is a tax that targets London disproportionately.

It has expressed further concerns that any revenue raised would be cancelled out by the loss in taxation in other areas, which a recent report by Savills calculated could be as much as £1bn.

Ian Fletcher, director of policy at the British Property Federation, said: “There is recognition in our industry that council tax on high-end property is low, and with no revaluation since 1991, in desperate need of reform. Instead of responsible reform, however, we get a mansion tax, and a political stunt, which has been used before.

“Raising taxes to save the NHS is a tactic Labour used in the early noughties, when national insurance rates were increased to save the NHS. Labour obviously calculates that associating a policy with the NHS will make it popular, but there is no obvious link and a much better use of any available funds would be to spend them on access to housing, thereby improving peoples’ health outcomes.

“The NHS requires funding certainty, but it is far from certain how much a Mansion Tax would actually raise. Once deferred payment options for those who are asset rich and income poor are taken into account, it is unlikely that it will even reach the projected £1.7bn per annum, which is very little when put into the context of the health budget.”

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