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  1. Wealth
September 26, 2012

Given Mansion Tax proposals, widows in £2m houses should be forced to sell

By Spear's

Who are these widows? Where are these widows? How many of them are there? We don’t know, but we do know one thing: they are being used as a scare tactic to avoid having a legitimate discussion on whether those who own larger homes should have to pay more tax on them

The Lib Dems at their conference have been calling for a mansion tax, and they might be on to something: those with large houses can probably afford to pay more.

The standard argument against a mansion tax on houses worth over £2 million is what we might call the lucky widow fallacy: ‘It might belong to a family who have owned it for generations, or a widow of modest means who does not want to move now that her husband has died and her children have moved out,’ as a Daily Mail blogger said.

Who are these widows? Where are these widows? How many of them are there? We don’t know, but we do know one thing: they are being used as a scare tactic to avoid having a legitimate discussion on whether those who own larger homes should have to pay more tax on them.

If there are any of these asset-rich, cash-poor widows out there, I have a modest proposal to solve this dilemma, raise some money to be spent in the economy and free up some housing stock: I suggest we force them to sell their £2 million houses.

Which widow needs a four-bedroom house they can barely afford to maintain? With the proceeds they can have a suitably-sized house and plenty of money to live off, and in doing so will widen the market for families with kids who actually need the space. Given that we have a massive shortage of housing stock, this would be some help.

There is certainly much better arguments to be made against a mansion tax, according to a report written by the director of Savills research, who might well be said to be parti pris:

‘A Mansion Tax set at 1% of the value over £2 million would yield just £1 billion (or 0.2% of total tax revenues) at most – but bring with it significant problems:

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‘It would be both difficult and expensive to value all relevant properties (there is little comparable transactional evidence; valuations would also be vulnerable to extensive legal dispute).’

(I have omitted his arguments about the widows and it undermining London’s attractiveness to the wealthy, as this depends on a lot more than council tax.)

But we should not be afraid of these bogeywomen. People may cry sentiment and property rights, but what about the right of others to afford an appropriate home? We tax people we think have too much money, so why not help out people whose homes are too big?

So watch out, grannies: those houses you’ve been selfishly keeping to yourselves could serve many greater purposes.

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