Further evidence emerges that the Liberal Democrats property proposal does not add up

Wednesday, 30 September 2009 11:23

Andrew Turner, head of Residential Agency at Smiths Gore, has already questioned the wisdom of the Liberal Democrats’ proposal for a ‘property tax’ on properties over £1m. Further trenchant criticism comes from Jason Beedell, Smiths Gore’s Head of Research. Beedell focuses on the question of the valuations themselves.

He says, ‘We have seen how the values of properties have been affected by the stamp duty bands. Because of the extra stamp duty payable once you pass the stamp duty thresholds of £250,000 and £500,000, sales tend to take place just below the thresholds. Depending on how the Lib Dems propose to value properties, I can see the same thing happening in this case and sales taking place just below the £1m threshold. It will also be interesting to see how the houses are going to be valued. The valuations that Council Tax is based on are for 1991 and house prices have risen by about 130% since then. Liberal Democrat officials have admitted that they don’t know whether the new tax would be based on Land Registry figures, house sales, or whether local authorities would have to carry out new valuations.’

Finally there is the question of where the property starts and ends, adds Smiths Gore’s head of farm Agency, Giles Wordsworth. ‘When you have a large house in a small garden then it is comparatively straightforward. When the garden extends to 500 acres then the situation is very different. I can’t believe that the farming industry, facing reduced product prices particularly in the arable and dairy sector, are going to thank politicians who add to the farm’s annual costs by placing an additional charge on the farmhouse,’ he concluded.