James Cleverly, the prospective Conservative candidate for Mayor of London, has condemned Andy Burnham's proposed Family Homes Tax as "yet another attack on London." Cleverly argues that lowering the threshold for the so-called mansion tax to £1.5m would disproportionately penalise ordinary Londoners, who would be paying the levy on homes that are far from mansions.
Threshold cut would double affected homes
The criticism follows last year's announcement by Rachel Reeves of a surcharge of £2,500 to £7,500 a year on homes worth more than £2m. That policy was billed as a "mansion tax," supposedly targeting "less than the top 1 per cent of properties." Now, Burnham is considering lowering the threshold to £1.5m, which Cleverly says would more than double the number of homes caught across England, to 271,000, and drag in nearly 62,000 more in London alone.
Cleverly highlighted that outside London, £1.5m might buy something resembling a mansion, but inside the capital, it often only gets a terraced house with a small garden. He pointed to data showing that of the London homes sold between £1.5m and £2m last year, one in six were flats, and most of the rest were terraced houses. "Nobody in Lewisham, where I was born, thinks that's a mansion. Nor do they in Bexley and Bromley, where I served as an Assembly Member, or in Ealing, where I went to university and met my wife," he said.
Ordinary families hit by price inflation
Cleverly argued that the people living in these homes are not multi-millionaires but teachers, nurses, electricians and retired workers who bought a house years ago, paid off the mortgage and raised a family. According to Hamptons, 60 per cent of the homeowners who would pay the tax bought their home for less than £1.5m. He noted that at £2,500 a year, the charge is over £200 a month on top of council tax, for a family whose only crime was buying a house in London a long time ago.
Even Sadiq Khan has expressed opposition to the tax, but Cleverly said the Mayor's objection means little if his colleagues in Downing Street don't listen. Cleverly, who previously served as shadow housing secretary, warned that Labour's policies were driving up the cost of building through higher energy costs, higher material costs, and higher taxes on employing people. He described this as a "double whammy" for London, where young people can't afford homes because it's harder and more expensive to build them, and those who have bought homes are now taxed for it.
Revenue leaves London, boroughs lose out
Cleverly also raised concerns that any tax revenue raised from the hike would not stay in London. Wandsworth, Kensington and Chelsea, Westminster and Richmond say their residents alone would pay over £270m a year, but not a penny would fund a local service. The money goes straight to the Treasury. At the same time, Labour's funding formula is stripping money out of those same boroughs, with Wandsworth alone losing £84m. A council finance chief called the plans "the most badly designed tax on properties since the one on windows, 330 years ago."
Cleverly concluded that Andy Burnham does not understand London, seeing a city full of wealth and reaching for the cash, without seeing the families who bought a home, raised their children and want to stay put. He said London needs a Mayor who will say no to this tax and back Londoners instead of treating them as a cash cow, adding, "That is the Mayor I intend to be."
