This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/uk_politics/8385575.stm
The article has changed 6 times. There is an RSS feed of changes available.
Version 0 | Version 1 |
---|---|
Lib Dem rethink on 'mansion tax' | |
(about 5 hours later) | |
The Liberal Democrats have doubled the threshold at which they say homeowners should pay an annual "mansion tax". | |
Properties will now have to be worth at least £2m to incur a 1% charge - the previous plan was to charge 0.5% a year on a property's value above £1m. | |
Party leader Nick Clegg said the "principle" remained the same but "we just looked at the figures". | |
The party is also pledging to scrap income tax for four million people earning less than £10,000 a year. | |
Treasury spokesman Vince Cable unveiled the mansion tax proposal at the Lib Dem annual conference in September. | |
The plan would have seen people having to pay 0.5% of the value of their property above £1m each year - so someone with a house worth £1.5m would have had to pay 0.5% of £500,000, which is £2,500. | |
But it prompted an angry reaction from senior Lib Dem MPs, including members of the frontbench team, who said they had not been consulted. | |
'Simple, fair, do-able' | |
Many in the party said they feared it could damage their election prospects in London and the south of England, where property prices are highest, and would penalise poorer pensioners living in large properties. | Many in the party said they feared it could damage their election prospects in London and the south of England, where property prices are highest, and would penalise poorer pensioners living in large properties. |
Mr Clegg told BBC One's Breakfast: "The principle is very clear. People who live in very large houses, mansions, should pay some more money, so we can give some back to the majority of British taxpayers. | |
"It does what it says on the tin. It's a mansion tax. It goes towards what many people want from the tax system. | |
"Nothing has changed in terms of the principle... We are the only party in British politics who have a plan to make taxes fair. This is a simple, fair, do-able plan." | |
The change will see the property price threshold raised, so that the charge only applies on the value of a property above the £2m mark. | |
'Most radical for a generation' | |
So, for instance, it would be payable on £500,000 of a £2.5m home. | |
It would mean a person living in a house worth £2.5m paying £5,000 a year in tax. | |
But someone with a home worth £1.9m would now pay nothing, whereas they would have faced an annual charge of £4,500 under the original mansion tax plans. | |
The Lib Dems also say they plan to use the revenue generated from this and other tax rises for the better off to help those on lower incomes. | |
They say they will raise the threshold at which people start paying income tax to £10,000 and that this will leave poorer families about £700 a year better off. | |
But four million top-rate taxpayers will lose out as they will no longer be able to claim tax relief on their pension contributions at the higher rate. | But four million top-rate taxpayers will lose out as they will no longer be able to claim tax relief on their pension contributions at the higher rate. |
The full plans will be announced later, with the party describing them as "the most radical tax reform in a generation". |