Tuesday, March 18, 2014

And nary a Poor Widow In A Mansion in sight

Mansion tax 'could trigger huge crash in property prices': Owners' lobby group claim that 'economically illiterate' levy is just politics of envy

A powerful new lobbying group containing dozens of the country’s super-rich – and backed by a Tory MP – has been set up to thwart moves to introduce a mansion tax. The secretive outfit hopes to overturn public support for the proposed levy on multi-million-pound homes by arguing that it is ‘economically illiterate’ and would trigger a devastating crash in property prices. The new lobbying group, organised by a property mogul who operates in some of the capital’s most exclusive areas, was discreetly launched last November at a meeting in a West End restaurant attended by 65 of the richest people in the UK – including Russian oligarchs and multi-millionaires from the Middle East.

Posted by mark wadsworth @ 10:25 AM (2836 views)
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11 thoughts on “And nary a Poor Widow In A Mansion in sight

  • You would have thought that the Occupy movement (whatever’s left of it, at least) would sit up and take notice of this. Anything that gets billionaires and oligarchs in a room together to discuss a plan of action is probably a step in the right direction.

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  • This just in…

    “Oligarchs hold secret meetings to fix prices”

    A news item worthy of The Day Today.

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  • Why would Oligarchs care about a measly £20k/year tax? The are raking in millions without paying any tax.

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  • I don’t think being upset about oligarchs and their stolen, tax-free, offshore fortunes that cause social disruption to onshore average-earning taxpayers is somehow, er, the politics of envy. Unless you count the unstoppable power of global kleptocrat class as a thing to which normal, moral, sensible people should aspire.

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  • @3 IIRC, the tax is banded, so it’s 1% of everything over £2m. £20k/year would be the liability for a £4m flat.

    That chap in 1 Hyde Park paid £136.4m. He’d pay more like £1,344,000/year (assuming he hasn’t made a return on the flat, which he probably has since April 2011).

    Only, he wouldn’t because the tax liability would push the value of his home down drastically.

    Back of the fag packet stuff, but if the new value of the house is the £136.4m minus the PV of the liability, and our oligarchs can get a 3% nominal return for sure, elsewhere, the value of his flat drops around £33.4m and their liability is about £1m/year.

    I don’t think you’d have to offer to these guys a free dinner to get them to turn up to that meeting.

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  • To those of us who have kept pigs, you will notice the similarity of this group of ‘super homeownersits’ to when you try and pull pigs from thier feeding trough. They will squeal & squeal then start bighting like mad.

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  • mark wadsworth says:

    Ta for comments. This crack bunch of kleptocrats couldn’t actually find any PWIMs, so they just invented them:

    “In an article for today’s Mail on Sunday, Mr Johnson [Tory MP] says:

    ‘Labour and the Lib Dems would have you believe that the people they want to hit are oligarchs and international bankers.

    ‘But the overwhelming majority of victims would be Britons who find themselves living in a house that has nudged over the threshold.

    ‘That includes people who currently have no idea of the risk they face.

    ‘It is hard to think of a tax that is more viciously unfair. It hits families who have worked hard and traded up the property ladder only to find themselves walloped for their success.’

    I thought the whole point about PWIMs (a creature of Homey imagination) was they never had two pennies to rub together and bought a home in London decades ago for a few hundred pounds and its value rose by itself. All of a sudden the Homeys are talking about people who worked hard and traded up? It’s was the income tax on what they earned which walloped them, not the modest tax on entirely unearned paper gains.

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  • “He claimed a typical salary for someone in a £5 million house is about £150,000 a year, leaving them less than £100,000 in take-home income – around half of which would have to be paid to the Treasury in tax.”
    Somebody who has is renting or has recently bought a £5m house with say a 20% deposit will need to earn a whole lot more than £150k. Rent at a very conservative yield of 3% would be £150k. A salary of £340k would net to £170k after employer + employee’s NI and income tax. ‘Mansion tax’ will be £30k, which is a significant but not disastrous increase. Since someone on £340k got approx £7k income tax reduction in the last budget via the dropping of the 50p tax rate, it’s really not that bad.
    But of course someone’s £340k salary is ripe for the picking for the public purse, but someone who bought a house for £very little decades ago and now has millions of totally unearned wealth is a noble individual who should not his very particular property rights violated…

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  • The above comment is correct: the proposed tax applies to ONLY that portion of the value of a property >>ABOVE>> £2m. Bravo! It’s about time we stopped reverting to a highly-polarised Medieval / Victorian society and the rich paid at least a pittance of their fair share (which they would no doubt get around off by some offshore means). Bring it on. For the first time EVER, I’ll vote Labour.

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  • Notes from the meaning:

    i) We will divert attention away from billionaires by focusing on the plight of humble multimillionaires at the very bottom of the 1% who got in early enough to buy a £5m house, even though they’ve never made more than a measly £150k/year.

    ii) We will pretend the tax is payable on the whole amount, not the amount over the threshold. People will not question this, as stamp duty works in this way and if they are too stupid to be millionaires, they must be too stupid to see the distinction.

    iii) We will avoid drawing attention to the fact that the fall in house prices will significantly reduce the more humble multimillionaires’ tax liability.

    iv) We will assert that the multimillionaires will struggle to pay the tax, even though most of them will be far more concerned by the depreciation on the paper value of their houses, that they were not planning on selling any time soon anyway.

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  • The first sentence sums up what is so wrong in this country; a lobbying group is “powerful”, despite only having “dozens” of members, simply because of how much cash they have – and they’re backed by a Tory MP, why – because he is a shareholder in a Property Development Company. So we have a group of, by the sound of it, a few dozen mainly foreign investors in UK property trying to influence UK economic policy through a Tory MP, despite the fact that this would be a positive thing for millions of Brits. IMO Richard Harrington needs to decide what he wants to be, an MP, where his job is trying to do what’s best for the people of the country, or a Property Developer, where his job is to maximise his income through the Property Market. The fact that he can do both is clearly a conflict of interests and should be outlawed.

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