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Six things you should know about Labour's mansion tax

Ed Miliband's debate with Myleene Klass this week shows we need to be even clearer on our mansion tax proposals - and how they would work in Broxbourne. Let's not forget that the proposals apply only to the 0.5% most expensive homes in the country

One

Labour's mansion tax will help to fund our NHS.  If Labour wins the election we will raise £2.5 billion a year, on top of the Tory spending plans we inherit, for an NHS Time to Care Fund. The mansion tax will contribute £1.2 billion towards this, helping to pay for thousands more doctors, nurses, midwives and homecare workers, and to guarantee that patients in England will wait no longer than one week for cancer tests and results by 2020.

Two

Labour's mansion tax will raise around £1.2 billion. That's not just Labour's estimate, it's what the Chief Secretary to the Treasury says.


Three

Labour's mansion tax will only apply to homes worth £2 million or more. The vast majority of houses, even in London, are worth far less than this – the tax will apply to fewer than 0.5 per cent of the homes in the country. And the £2 million threshold will rise in line with the average rise in prices of high-value properties over £2 million – so the number of properties paying the tax will not increase. If prime property prices continue rising then by the time the tax is introduced the starting point will be higher than £2 million.

Four

Labour's mansion tax will protect those who are asset-rich but cash-poor. People in high-value homes who do not have high incomes – those who do not pay the higher or top rate of tax, and earn less than £42,000 a year – will have the right to defer the mansion tax until their property changes hands.

Five

Labour's mansion tax will be progressive. Those owning properties worth £2-3 million will only pay an extra £250 a month through this new tax – the same as the average top band of council tax. We think that owners and investors in properties worth tens of millions of pounds should make a much bigger contribution. And we will look at asking overseas owners of second homes in the UK to make a larger contribution than people living in their only home. It can’t be right that the foreign buyer of a £140 million flat in Westminster earlier this year will pay just £26 a week in council tax – the same as the average-value property in that council area.

Six

Labour's mansion tax will use a simple banded system. Valuations will not be needed for most properties – it will be clear which band they fall into. The government's new tax on properties bought through companies relies on owners submitting a self-valuation to HMRC – so will the mansion tax.

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