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Fri, 26 February 2021

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Boris Johnson could introduce ‘mansion tax’ in shock Budget plans

Boris Johnson could introduce ‘mansion tax’ in shock Budget plans
3 min read

Boris Johnson is said to be weighing up shock plans to introduce a “mansion tax” in next month’s Budget.

The shock move will infuriate traditional Tory supporters as the Prime Minister seeks to court the former Labour voters who switched to his party at December’s election.

It is an idea first put forward by the former Labour leader Ed Miliband ahead of the 2015 election, but was widely derided by the Tories.

In fact Mr Johnson himself attacked the opposition’s plans to slap a levy on homes worth £2million, calling it a “tax on London” when he was mayor of the capital.

He said it would "totally clobber” families and the elderly who lived in high-value properties but were cash-poor, saying the idea was “deeply unpopular”.

In a speech to his party’s annual conference Mr Johnson: “What is the real answer to our housing problem?

“To put a new tax on housing, hammering those who find themselves living in a property whose value inflates through no fault of their own, punishing those who have worked hard for years to pay their mortgages and those who hope to pass something on to their children?”

But according to the Sunday Telegraph two separate sources have confirmed that raising more tax from better-off homeowners had been discussed on separate occasions in the past few weeks at the highest ­levels of the Treasury and Number 10.

The newspaper said that could manifest itself in a “recurring” wealth tax which would primarily affect London and the South East.

It would either be introduced in the form of a levy, as per Mr Miliband’s plan, or with an additional higher band of council tax.

The Budget on March 11 will be Sajid Javid’s first since becoming Chancellor, and he is believed to also be looking at cutting pension tax relief for higher earners, which could raise an extra £10billion a year.

But this would primarily affect wealthy Tory voters, as would any “recurring” wealth tax, leading to anger from the party’s MPs.

Party grandee John Redwood said: “The Budget must be full of optimism, promoting growth and encouraging more transactions and people to spend their wealth and income, not to destroy it.”

John Strafford, a Campaign for Conservative Democracy spokesman said: “I am a little bit worried about the direction the party is going in on this tax issue.

“I feel that we are a low Government spending and low tax party. That is what people like to see. Many of our new voters – that is what they want to see.”

And writing for the Sunday Telegraph, John O’Connell of the TaxPayer’s Alliance said: “It seems to be a misunderstanding of what the ­Tories’ new voters were looking for.

“They may be new converts to the message, but they still expect the ­Conservatives to be the ones backing them when they succeed.

“Levelling up doesn’t mean cutting other people down.”

A Treasury spokesman said of the reports: “While we keep all aspects of the tax system under review, we do not speculate ahead of the Budget.”


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