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Fact Check: Myleene Klass vs Ed Miliband on mansion tax

Posted by: In: Real Estate 19 Nov 2014 Comments: 0 Tags: , , , , , , , , , , ,
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The Internet erupted with laughter, shock and anger this week, when former Hear’Say singer Myleene Klass appeared on ITV’s The Agenda and laid into Labour leader Ed Miliband’s proposed mansion tax, which will charge a fee to those who own properties worth more than £2 million.

Ed appeared surprised and dumbfounded, which Twitter cheered, but Myleene also made claims that viewers found far-fetched. Who was the real victor? Now the dust has settled, we take a look at the facts.

1. London will face the majority of the mansion tax

The musician told Miliband that the “80 per cent of the people who are going to be paying this tax” live in London.

This is correct: the vast majority of properties worth more than £2 million are located in the UK capital and surrounding areas.

2. £2 million will get you a garage in London

“What is so disturbing is the name in its own right: ‘mansion’,” said Myleene. “So immediately you conjure up in your head these Barbie-esque houses… but in London, which is where 80% of the people who are going to be paying this tax actually live, the south-east of England, have you seen what that amount of money can get you? Often it’s like a garage.”

This is incorrect. While London house prices are cooling now, they remain far higher than the rest of the country. Nonetheless, the most expensive garage went on sale earlier this year and only fetched approximately £500,000. An absurd amount for a garage yes, but if you had £2 million to get one, you would have a lot of change left over.

3. Grannies will be paying the tax rather than rich people

“When you do look at the people who will be suffering this tax, it’s true a lot of them are grannies who have had these houses in their families for a long, long time,” Klass continued. “The people who are the super-super-rich buying their houses for £140m, this is not necessarily going to affect them because they have got their tax rebates and their amazing accountants. It’s going to be the little grannies who have lived in those houses for years and years.”

It is true that UK household wealth has soared in recent years, with rising property prices making a growing number of Brits accidental property millionaires. Rich people, at whom the tax is targeted, are also likely to have a team of accountants to help them avoid the levy. Nonetheless, this does not mean that only grannies will be faced with the charge: there is a kernel of truth here, but one that is also highly exaggerated.

4. Everyone will be paying the tax soon

“Later on, when fiscal drag kicks in, we’re all going to be paying it,” the musician added.

Unfortunately, that is another claim that is not true: the Labour outline of the tax states that the £2m threshold will “rise in line with the average rise in prices”, which means that the number of properties subject to the tax will not increase.

5. Ed Miliband is not very good at this

Ed Miliband did not say much in response on the TV show, partly because Myleene was so forceful and vocal and partly because he is apparently not very good at dealing with such situations.

“The values of my government are going to be different to the values of this government,” he offered. “I say bring on this debate. I think it is a principled view that those with the broadest shoulders should pay the biggest burden. I think that is a decent, right principle and that is not happening under this government.”

This did not stem the tide of beration from Myleene and the show’s other panellist, former US Ambassador Sir Christopher Meyer (who lives in Chelsea).

“You’re going to screw me royally,” he said. This part was true.

While the panel (which also included Allison Pearson, who lives in pricey Cambridge) was not representative of average Brits – Myleene recently sold her home for almost £2 million – it was only later that Miliband found a response to the situation.

“Here’s why our NHS needs a mansion tax. It’s Pure and Simple”, he tweeted, a nod to Hear’Say’s first hit single.

The principle of the mansion tax may be sound, but the Labour leader will face many similar challenges in the run-up to the 2015 election, in which housing will play a key part. He may need more than Hear’Say lyrics to win the property debate.

UK, Personal Finance, London house

Source: The Movechannel

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