Lib Dems Mansion Tax Plans To Include Holiday Homes, Rental Properties

Tax On Holiday Homes, Jewellery, Paintings

Owners of holiday homes and rental properties would be drawn into paying a "mansion tax" under Liberal Democrat proposals to extend the policy beyond £2 million main residences.

An internal policy consultation has concluded there "may be merit" in imposing the 1% levy instead on anyone with a land and property portfolio worth above the same threshold.

The document, to be debated by activists at the party's spring conference next month, includes a number of radical options, including a French-style wealth tax on assets such as jewellery and paintings.

Holiday homes could be included in the £2m threshold for mansion tax

Vince Cable poured cold water on proposals being debated by his party to bring holiday home and buy-to-let landlords under the mansion tax or impose a wealth levy on possessions such as jewellery and paintings.

A party panel had produced some "wacky" ideas for the 2015 general election manifesto but they were "most emphatically not party policy" and were almost certain to be rejected by activists, he said.

Cable did say Liberal Democrats could vote with Labour in favour of a mansion tax if Ed Miliband does not play "political games" with the issue.

It was welcome that Miliband had "seen sense" and adopted the long-held Lib Dem plan for a 1% levy on £2 million-plus homes, he said - calling it "a policy whose time has come".

But he said he suspected the Opposition would be unable to resist linking any Commons motion to its plans to revive the 10p income tax rate - scuppering any hope of a coalition-splitting vote.

The proposals emerged as Labour - which this week backed the idea of a mansion tax to fund the return of a 10p income tax rate - challenged the Lib Dems to support it in a Commons vote.

Extending the mansion tax was reported to be favoured by some within Labour as a vote-winner in the South West, where there is anger over second-home buyers forcing up prices.

But senior figures are also believed to have concerns that the move - in a package drawn up as part of preparations for the 2015 general election manifesto - could see some people taxed twice.

Landlords already pay tax on any rent they receive.

MP Tessa Munt, one of those who helped draw up the consultation paper, told the Mail on Sunday it was an "interesting idea" and would be put to activists in Brighton.

But the document says it would be "generally quite complex to administer" and party Treasury spokesman Stephen Williams said he expected it to be "firmly spiked" by activists.

A Lib Dem spokesman said: This consultation is part of the process of asking for ideas on how to ensure a fairer tax system.

"It is up to Lib Dem party members as to whether these eventually become party policy."

Conservative Party chairman Grant Shapps said raising thresholds was "the most efficient" way to ease the tax burden, and hinted the Tories would look at pushing it beyond the £10,000 target for this parliament.

Asked about the prospects of the Chancellor adopting the 10p rate, he told BBC Radio 5Live's Pienaar's Politics: "I'm not the Chancellor and I won't try and pre-empt him.

"But what I will say is I'm absolutely confident that we will reduce tax, not to 10% but to zero for even more people by the election, and it would be nice if we could get the Labour Party to actually vote for budgets which removed millions of people out of tax entirely.

"We have already said we would like to get it up to £10.000 and I don't think I would be revealing too much to say that our ambition might be to get it higher.

"Taking people out of tax entirely is the most efficient, best way to do this. I would love to do it."

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