As I predicted this morning, the stamp duty holiday for first time buyers up to £250,000 has come with a major “sting” – an increase on the levy for people exchanging £1m-plus homes.
Didn’t Labour slam Vince Cable for suggesting an (albeit different) proposal for a mansion tax a few months ago? Ian Pearson, a Treasury minister, said last May that “raising the stamp duty land tax threshold to £250,000 would not be an effective use of public money”.
The proposal is part of an increasing sting-the-rich focus to Labour policy in recent months and is also exemplified by the plan to freeze the inheritance tax threshold for four years, announced today.
Pre-credit crunch it would have been a bold calculation to make, even though the figures involved are not gigantic. Now much less so.
On reflection the Cable mansion tax wasn’t quite the same. The problem with the Lib Dem proposal is that it hit cash-poor people (eg the retired) living in big homes, regardless of their financial position. At least this one only affects you if you are buying the home and therefore – you’d imagine – had enough money.
Worth pointing out that the exemption for first-time buyers lasts only two years. The new 5 per cent band for homes over £1m could in theory go on forever.