Should you fear a Government Property Tax?

With political parties of all colours trying to find new areas to boost tax revenue and reduce the budget deficit, landlords are starting to feel the heat as a new annual property tax is muted.

When Liberal Democrat leader Nick Clegg outlined his party’s plans for a wealth tax ahead of their annual conference in Brighton, it soon became clear that they are likely to involve a new annual property tax.

It has been reported that the proposal, set to be debated at the LibDem conference later this month, will sit alongside a proposal to limit the tax relief on Isas and pensions.

The report says some Lib Dems are pushing for the annual charge to be levied at up to 1.5 per cent of a property’s value on homes worth over a certain size. Others believe the tax should be based on a site’s rental value.

The tax is being promoted by a Lib Dem pressure group called Action for Land Taxation and Economic Reform, of which Clegg and Cable are vice presidents.

A Lib Dem source told national newspapers this week: “A land value tax is ultimately where many in our party would like to go – particularly as it as a tax on wealth, not income. Will it be Government policy? We will have to wait and see – we are in a Coalition. But there is a good chance it will become party policy. It is the natural successor to a mansion tax.”

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