Wealthy homeowners are already trying to dodge the mansion tax

Michelle McGagh
Inequality To Be A Key Election Issue
Inequality To Be A Key Election Issue

There must be a lot of wealthy people out there who are pretty sure of the next government will be Labour as three months before the election, there has already been a rush to avoid Ed Miliband's mansion tax.

Wealthy homeowners with a property have already started the search for loopholes in an effort to stay one step ahead of the levy, which will cost £250 a month for a person whose property is valued at the threshold of £2 million.

There is scant detail on the tax, and according to shadow chancellor Ed Balls, none will be forthcoming until after the election, so everyone seems to be making up their own routes around it.

So far, there have been reports about people splitting large family homes into flat worth less than £2 million each and even getting quotes to add extra doors to the front of the property in a bid to trick goodness knows who – council property surveyors? – into thinking a property is already flats.

Some individuals are looking at giving part of their property away, maybe to their children, and lowering its value while others are thinking about giving a family member a lease over the property to reduce its value.

Others have really thought outside the boxed and questioned whether putting a conference room and conferencing facilities into their home will help reduce the 'residential' aspect as part of the property will be for business.

Wealthy win

Maybe the most sensible, or least loony, idea is to get a property valuation done now while the property marketing is cool and your house may sneak under the £2 million mark. Arguably though, if Labour does get into power and enforce the tax then properties around this mark will fall anyway.

The fact that people are trying to find loopholes already, even if they are bonkers, shows just what great lengths individuals will go to in order to avoid tax. If this tax is introduced who's to say there won't be a clever scheme or tax quirk found that allows people to get around it – and let's face it if you have a £2 million house it's likely you can afford to get round the tax.

That's why taxing the rich is always tricky because they're wealthy enough to stay one step ahead.

It seems that Miliband is going to have a fight on his hands if he does make it to number 10 but let's all get some perspective; we've got an election to get through first but it's nice Ed has so many wealthy people believing in him.

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