In the comments to an article entitled "Homeowners explore ways to avoid looming mansion tax in UK", KLNs abound. In particular, one Geoffrey Gardiner writes:
Property taxation in the UK is on the occupier, not the owner, as the default rate is lower than if. like the Americans, one taxes ownership. Is it intended that the mansion tax should be on owners not occupiers? That requires a completely new tax department. If it is on ownership are joint tenants or tenants in common (such as husband and wife) to be taxed relative to the value of their shares? What if the property is long leasehold? Is the tax to shared between the lessee and the reversioner? Is a mortgage to be deductible?
None of these points have been mentioned by Miliband, presumably because his knowledge of property law is zero.
As pointed out in the article, the tax lowers the value of the property as the tax is effectively rent. All property taxes are in truth a way of nationalising without paying compensation (1). An annual tax of £3,000 should lower the value by around £100,000 in present circumstances. (2)
One can tax by reference to a property value, but the tax has to come out of income or some cash flow, such as from a sale, for no power on Earth can convert a house into food, heat, lighting or clothes for old age pensioners. The state is mainly by taxation appropriating part of the income (GDP) of the nation and the tax on property, despite its name. falls on the income of the tax payer. If he does not have the income he has to sell to someone who is capitalising income, that is saving.(3) The mansion tax will precipitate many sales as owners decide to trade down.(4) That will raise prices at the lower, aggravating the problems of first time buyers.(5) There is a limit on property taxes, the net annual saving of the personal sector (4).
1) in which case income tax is nationalisation of labour
2) so making the property more affordable. That's good, isn't it?
3) Poor widow bogey
4) Your evidence for that is?
5) Yeah, right, how many first time buyers are in the "just under £2M" market? Human shield.
He's probably right about Miliband, though.
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