Clegg in 'mansion tax' sale advice


Nick Clegg

Nick Clegg has suggested a home owner who would be hit by the Liberal Democrats' proposed "mansion tax" should consider selling the house he has lived in for 20 years.

The man, whose name was given only as John, rang in to the Deputy Prime Minister's weekly radio phone-in on London's LBC 97.3 to complain he would be unable to afford to stay in the property if the tax was introduced.

He explained that since he bought the home in the capital's fashionable St John's Wood area, the value of the property had "sky rocketed" to £5 million - leaving him facing the prospect of a massive tax bill under the Lib Dems' proposed annual levy on properties worth more than £2 million.

"I work hard, I earn a reasonable salary. I do not earn as much as Mr Clegg but I'm happy with what I earn, but no way could I afford to buy a house now for anything like £5 million," he said.
"Now, the mansion tax would mean I would have to pay an extra £30,000 a year tax, being 1% on the difference over £2 million. This would take my total tax rate to 78%. So my only option would be to sell the house that my family and I have lived in for 20 years and to withdraw my children from school."

Mr Clegg however strongly defended the plan, suggesting John would indeed be better off if he chose to sell up and move out.

"Because you paid very little for it - how can I put this? I'm obviously not urging you on selling your home but if you were, as your children get older and so on, to decide to sell your home, you would be millions of pounds better off because you've got a small mortgage from 20 years ago and that is in a sense, pure profit," he said.

"That's one thing which I don't know whether you're prepared to do anyway." The idea drew an unhappy response from John, who replied: "But it's my home and I have to move out of the area."

Mr Clegg also suggested that pensioners who were hit by the mansion tax could defer payment until after they died when it could be charged to their estate.

He said: "Of course you could make exceptions for those people who have lived in properties for a long period of time and have retired and obviously aren't in a position to pay that kind of levy every year. You could pay it as part of your estate, for instance."

© 2013 Press Association

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