Cable maps out new property tax levy

Date: 21st September 2009

New plans to tax Britons who live in high-end homes have been unveiled by Liberal Democrat shadow chancellor Vince Cable.

The levy would be charged at 0.5 per cent on the value of all homes worth over £1 million.

For example, £1 million of a £2 million home's value would be taxable - with the owner being charged an annual bill of £5,000.

Taxation levels are likely to increase over the years to come, as the government attempts to reduce levels of public debt.

Reductions in tax revenues caused by the credit crunch are likely to contribute in the UK's projected increase of net debts from 40 per cent to 80 per cent of GDP.

Mr Cable also proposed tax changes for low earners during his speech.

"The Liberal [Democrats'] starting point is to aim for fairer not higher taxes," he said.

"I would do this by lifting tax thresholds, providing an incentive to work and to save. It is wrong that people earning little more than the minimum wage should be dragged into the tax net."

The current Labour government also announced tax changes affecting high-income Britons in April's Budget.

Income taxes for those earning £150,000 or more per year are to be increased from 40 to 50 per cent from next April, while tax breaks related to pensions are also to be tapered down.