Mansion tax door closed for good

The mansion tax and any similar valuation-based property taxed has been consigned to the Whitehall dustbin for good, said Chancellor George Osborne in his Autumn Statement.

Despite behind the scenes arguments raging within the coalition between Conservative and Lib Dem partners for months, the mansion tax is finally dead.

In his speech reviewing Britain’s economic progress in the House of Commons, Osborne explained the mansion tax was too expensive to introduce.

He claimed valuing the nation’s housing stock is too expensive to consider and opening the door for future chancellors to top up taxes by leaving the door open on levying higher mansion taxes would prove ‘irresistible’.

This was clearly aimed at Labour shadow chancellor Ed Balls sitting opposite on the Commons benches.

The speech introduced no specific landlord tax changes – but property investors will gain from changes to tax allowances.

However, Osborne did point out the statement was tax neutral – meaning any gains were simply paid for by cuts elsewhere.

Several tax thresholds were raised – but the effective dates vary:

  • The tax free allowance for income tax payers rises by £1,035 to £9,440 a year from April 2013
  • Earnings for higher rate tax payers before paying income tax at 40% rise to £41,865 from April 2013 and 1% more to £42,285 in April 2014.
  • The annual exempt allowance for capital gains tax (CGT) increases 1% from April 2013 to £11,100
  • The nil rate band for inheritance tax (IHT) is up 1% in April 2015 to £329,000.

“The government believes that changes to tax and public spending should impact fairly across society,” said Osborne.

“In light of its decision to limit increases in benefits to 1%, and the government’s plans to make public sector pay awards that average at 1%, the government believes it is fair and consistent to limit increases in personal tax thresholds, while continuing to support low and middle income households through the increase in the personal allowance.”

Tags: