Last week’s Plenary was about The London Finance Commission recommendations and analysis; l took the opportunity to ask Prof Tony Travers why a Mansion Tax of sorts was not an idea propagated by the Commission, particularly in light of the example of New York which has such a scheme for properties over £2 million at half a per cent per annum? I suggested this could be an idea hypothecated for the building of much needed social housing in London, so essentially a force for good.

Such a scheme should be relatively simple to administer in London as most of the stock of properties worth in excess of £2 million are probably in the main, located in London boroughs like the City of Westminster & the Royal Borough of Kensington & Chelsea.  These boroughs already hand over a precept of their council tax over to the Mayor to the tune of around £310 per household and therefore, it could simply operate as an extension of this process.

In my view, one of the strongest merits of a mansion tax is that it would go some way towards rebalancing the gross inequality of the council tax regime.  The broad banding of property valuations is the fundamental flaw with the council tax.  It means that a large family home in the centre of town occupied by a family over a long period of time, having benefited from property inflation, but where the children have flown the nest, find themselves paying the same amount of council tax as that of multi-billionaires like Lakshmi Niwas Mittal & Abramovich! This is unfair and a London Mansion Tax could be organised in such a way that only those at the top of the tree are asked to pay.

I think the London Finance Commission has missed an opportunity to give some beef to the idea of a Mansion Tax, if not at a national level, most certainly in a London context.