Rt Hon Ed Miliband MP Leader of the Labour Party House of Commons London SW1A 0AA 9 October 2014
Dear Mr Miliband, Mansion Tax Proposals I am writing to express the deep concerns that members of the Westminster Property Association (WPA) has about your party’s proposals for a “mansion tax” on homes valued at £2 million or more. The WPA represents a combined commercial property portfolio of over £40bn and has over 200 members which comprises all the major property owners, developers, housing associations, occupiers and professional advisers into a collective voice to inform policy makers and drive the economic prosperity of the City of Westminster and the wider London and UK economies. Our members include commercial and residential owners and developers, across the full pricing spectrum from high-value properties to housing associations. The area covered by Westminster City Council may be one of the smallest geographical local authorities in the UK but it generates over 2 per cent of the UK’s total GDP, with the Core Central Activities Zone (CAZ) supporting over 300,000 jobs. As an organisation we fully appreciate the desirability of revisiting the taxation of high value residential properties and agree that, at the top end, there will have to be an increased contribution to the public purse. However, we have two issues with the existing proposal; First, the proposed tax would have a disproportionate impact on London with 90 per cent of those properties valued at over £2million located in the capital. Furthermore, the majority of these homes will be located in just three boroughs – Camden, Kensington & Chelsea and Westminster, with an estimated 15,000 properties being subject to the tax in the City of Westminster alone. Second, layering an additional charge over what everyone knows to be an out dated council tax settlement which, as it is based on valuations now over twenty years old, no longer reflects current relative values nationally merely compounds the inequities currently associated with residential property taxation.
The Westminster Property Association is a company limited by guarantee in England (Company Registration Number 8251671 | VAT Registration Number: 888310790) th 5 Floor, St Albans House, 57-59 Haymarket, London SW1Y 4QX Tel: 020 7630 1782 | Fax: 020 7630 8344 | www.westminsterpropertyassociation.com
We also fear that this specific proposal may have a negative impact on the property industry in central London and beyond. A new tax that so clearly sits outside of the normal/predictable taxation settlement is likely to send a negative signal to potential investors. Undoubtedly this would be problematic given that large parts of London have seen regeneration based on residential developer investment. We note that all of the main potential Labour candidates for Mayor of London have expressed similar concerns and objections to this proposed new tax. We ask that the Labour Party listen to the genuine concerns expressed by not only them, but a wide range of individuals and organisations. We do understand your desire to ensure that owners of more expensive properties pay a higher rate of local taxation on those properties. We believe that the Labour Party could achieve this simply by a reform of council tax banding which has not been altered since 1991. A wholesale or partial reform of the banding represents an opportunity for the taxation system to fall into line with current property values, and with the tax and structure already in place, would be a more efficient and effective route. It would also have the advantage of representing a national updating of relative value movements since 1991 and not be seen to single out a particular part of the country for focused treatment. We would be happy to discuss this with you and your colleagues if you felt that this would be helpful. Yours sincerely
DANIEL VAN GELDER Chairman
The Westminster Property Association is a company limited by guarantee in England (Company Registration Number 8251671 | VAT Registration Number: 888310790) th 5 Floor, St Albans House, 57-59 Haymarket, London SW1Y 4QX Tel: 020 7630 1782 | Fax: 020 7630 8344 | www.westminsterpropertyassociation.com
