Mansion tax ruled out to anger from Lib-Dems

Tories hardened their opposition to a mansion tax today with a Cabinet minister saying it would “clobber” London and the South-East.

Communities Secretary Eric Pickles said thousands of Londoners in relatively modest homes would have been hit by the Liberal Democrat plan to target £2 million properties.

“What would have happened in London demonstrates how impractical this whole measure would have been,” he said. “People in the capital would have woken up and accidentally found themselves in a mansion.

“It would have been an assault on aspiration. It would have cumbersome and expensive to calculate and it would have clobbered the South-East.”

Researchers estimate that 91 per cent of homes worth £2 million or more are in London and the South-East. Chancellor George Osborne ruled out the mansion tax plan at the start of the Conservative conference.

He also poured cold water on another Lib-Dem idea, for extra council tax bands for expensive homes, which would also have hit London hardest.

Furious Lib-Dem former Treasury spokesman Lord Oakeshott asked: “Are we in coalition or a Conservative government?” He said the Lib-Dem party conference voted by 300 to two in favour of a mansion tax, adding: “£2 million is Middle Notting Hill, not Middle England.”

London-based property entrepreneur, John Hitchcox. chairman of property firm Yoo, said a mansion tax would have driven away foreign investors.

“More than half of high-net-worths around the world name luxury London property as their top investment vehicle,” he said “These people aren’t just buying homes — they’re setting up businesses, schooling their kids, buying cars and employing tax-paying British adults.

“A house may be bricks and mortar but for many, it’s a base to their lives and it’s worth remembering that in times of economic turmoil we need all the wealth-generating individuals we can get.”