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Mark Versallion
Parliamentary Candidate for Stretford and Urmston

19Sep07

LIB DEMS' HOUSE PRICE TAX WILL HAMMER FAMILY HOMES

As Liberal Democrats endorsed their latest tax plans this week, Conservatives warned that the small print backs plans for European-style house price taxes.

These plans give Gordon Brown the green light to extend the new house price tax recently introduced by Labour in Northern Ireland to mainland Britain. Conservative Parliamentary Candidate, Mark Versallion said “Just because house prices have risen doesn’t mean that local residents can afford higher local taxes.”

Calls for 1% house price tax: The detail of the Lib Dems’ official tax plans pledges a "long-term commitment to a system of land value taxation" on domestic properties. It talks up the system the Danish system of a "national 1 per cent property tax" and regular revaluations. They admit their policy of local income tax and “removing the direct taxation of property” is not sustainable, and therefore “taxation of property should be retained” via a “better mechanism”. A 1% house price tax would mean a yearly tax bill of £2,133 a year on an average home in England.

Labour Ministers back the tax: Such a new house price tax system has already been introduced in the UK by the Government. Since April, all homes in Northern Ireland are charged a 0.63% tax on the value of the home each year (local taxes in Ulster are lower than on the mainland). Liberal Democrats’ backing for land taxes gives a signal to Gordon Brown to introduce the taxes in England. A 1% house price tax was also recommended by the Lib-Lab Scottish Executive’s report on town hall taxes last year, and the 1% Danish tax model was talked up in the Treasury’s Euro Changeover Plan (Lib Dems still support the Euro).

Eric Pickles MP, Conservative Shadow Secretary of State for Local Government & Communities, said: “Sir Menzies Campbell has already admitted that he wants to hammer families with punishing taxes. Now the small print of his tax plans backs moving to Euro-style house price taxes. This could mean typical bills of over £2,100 a year on families with regular revaluations to top it up.

“Labour Ministers have already introduced such a tax in Northern Ireland to tap into their recent rise in property values. Families and pensioners who saved and improved their homes face soaring tax bills, without any improvements in their local services. Just because house prices have risen doesn’t mean that local residents can afford higher local taxes.

“At a time when the housing market is so bruised, it is alarming that Liberal Democrats are now giving Gordon Brown the green light to impose new house price tax across Britain. Conservatives are now the only party pledging to stop these new taxes.”

Mark Versallion added “The average house price in Trafford is £242,390. This Lib Dem tax policy of one per cent on the value would mean £2,424 in tax for a home at this value. That is a great deal more than present rate and you know any increase in tax forced through by LibDems and Labour would not be met with a reduction in tax elsewhere."