Lib Dems plotting house price tax to hammer family homes

Tax proposals give Gordon Brown the green light for Euro-style property taxes

 As Liberal Democrats endorse their latest tax plans,  Conservatives warned today that the small print backs plans for European-style house price taxes; this effectively gives Gordon Brown the green light to extend the new house price tax recently introduced by Labour in Northern Ireland to mainland Britain.

 ·                      Calls for 1% house price tax: The detail of Sir Menzies’ 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 that their policy of local income tax and “removing the direct taxation of property at all” 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 United Kingdom by Labour Ministers. 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 (Liberal Democrats still support the Euro).

 ·                      Chris Huhne and anti-Orange Book cheerleaders for new land taxes: The new left-wing rival to the ‘Orange Book’, published by Chris Huhne and his supporters this week (‘Reinventing the State’), backs "the introduction of land value taxation for domestic properties". Chris Huhne is a long-term cheerleader of such taxes, asserting: "land value taxes are an idea whose time has come" and calling for "a tax system that allow[s] public authorities to tax the rental value of land.”

Andy Morgan, Councillor for Hulton Ward 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 £ 1,300 a year on families in Bolton and the North West 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.”