‘Marxist’ Labour garden tax would hit 10million families
‘Intending to squeeze homeowners dry’
MORE than ten million households will be whacked by Labour’s ‘garden tax’ bombshell, it was claimed last night.
Under plans buried in its manifesto, the party wants to replace council tax and business rates with a charge based on land value rather than house prices.
The Tories have claimed the cost of the 3 per cent annual levy for an average home would be £3,837 – more than three times the £1,185 council tax bill they currently pay.
Homes with larger gardens are likely to face the steepest increases. According to official figures, there are 10.3million homes in England and Wales with gardens above the national average size of 200 square metres.
A breakdown shows that home on larger than average plots include 1.8million properties in the South East, 1.3million in the North West, 1.3million in the East, 1.2million in the West Midlands and 1.1million in the South West.
Chancellor Philip Hammond yesterday accused Labour of ‘attacking land on Marxist principles’ with the proposal.
‘This is one of the ways in which Labour will tax ordinary families to pay for its profligacy,’ he told The Sunday Telegraph. ‘It is an old favourite of the extreme Left. There is more than a little bit of ideology in this, attacking land on Marxist principles.’
Tory communities minister Andrew Percy said last night: ‘Under Jeremy Corbyn’s plans no one escapes Labour’s intention to squeeze homeowners dry.
‘Either you are whacked with massive bills in places where property is dearer – or you’ll suffer a hike for living in a part of the country where there is more space for bigger gardens.’
The Tories said homeowners face a ‘triple tax whammy’ under Labour with the land value tax, changes to inheritance tax and the risk of rising interest rates.
Labour’s plans for £434billion of extra government borrowing would push up interest rates and cause the average mortgage in England and Wales to rise by £1,386 a year, the party said. Combined with the land value tax, this would lead to an average annual bill of £5,000.
Jeremy Corbyn has also pledged to scrap Tory plans to raise the inheritance tax threshold to £1million by 2021. Instead, he would reduce it from £850,000 to only £650,000 – a move which would slash the amount the middle classes can pass on to their children.
A costings document that accompanies Labour’s manifesto lets slip the party’s plan to hold a ‘review into reforming council tax and business rates and consider new options such as a land value tax, to ensure local government has sustainable funding for the long term’.
A blueprint for how the new tax would work has been drawn up by the Labour Land Campaign. It has received glowing praise from both the Labour leader and his shadow chancellor, John McDonnell, who has said the levy will ‘raise the funds we need’. Under the proposals, the new tax would be imposed as a levy of up to 3 per cent on the value of land.
Earlier this month, Labour business spokesman Rebecca Long-Bailey endorsed plans to have ‘a land tax to ensure local government has sustainable funding in the long term’.
Mr McDonnell has previously said the levy would be a ‘radical alternative to austerity’. During his leadership campaign in 2015, Mr Corbyn said he had been ‘impressed by the work of the Labour Land Campaign… on making the case for land value taxation, which can capture for local benefit some of the private gains generated by public investment, while promoting more efficient use of land’.
Labour’s inheritance tax policy is not in the manifesto, but appears in a separate costings document. The 40 per cent inheritance tax rate is charged on the amount of the estate above the threshold, which means that under Labour’s plans, children inheriting £850,000 from their parents would face an £80,000 ‘death tax’ bill.
Research by the Tories has claimed that an extra 1.2million homes could be liable for the tax under Labour. The number would more than double from 725,000 under the Tory plan, to almost two million by 2021 under Mr Corbyn’s proposal.
Foreign Secretary Boris Johnson told The Sunday Times: ‘This is a triple tax whammy, a ruthless attack on people’s property and possessions over their
lifetimes. It will wallop homeowners.’ Experts have warned that despite pledging a raft of tax rises, Labour’s plans still do not add up. The Tories say Mr Corbyn thinks there is a ‘magic money tree’.
Last week the Daily Mail revealed that he was considering a ‘wealth tax’ to fund social care. Economists said this suggested people would have to pay an annual tax on investments such as property. This is on top of Labour’s commitment to hit those earning £80,000 or more with higher income tax.