Cable mulls new property tax

Business secretary Vince Cable has re-opened the possibility of a “mansion tax” on homes worth more than £1m in a series of television interviews at the weekend.

Cable said that he was in discussions with chancellor George Osborne about moving taxes to property when the 50% income tax rate for the highest earners is eventually abolished.

He said: “It needs to be a change that is fair overall and does take account of the fact that the wealthy have got to pay their share. And the emphasis may well have to shift from high marginal rates of tax on income that are undesirable, to taxation of wealth, including property.”

Cable did not specify exactly what was being considered, but his comments have encouraged speculation that the Treasury is considering Cable’s former policy of forcing property owners to pay 0.5% of the value of their property each year on its value above £1m.

The Lib Dem policy was dropped last year as part of the Coalition agreement.

Asked directly on BBC Radio 5 Live whether he was considering the mansion tax idea, he replied: “There is a very strong argument … that you need to have a proper base for taxing property. I’m sure that’s one of the things we’re going to have to look at as we change away from these very high marginal rates.”

However, other reports have suggested that the Treasury is looking at a new higher rate of council tax, rather than a direct property tax.