BUDGET-SAVING plans for a “mansion tax” on high-value properties smack of “the politics of envy” and will put people off living in the Capital, critics said.
Proposals aimed at making the council tax more “flexible” and allowing higher rates for homes in the top bands have also been criticised by upmarket estate agents, who described the idea as a “further challenge” for house buyers.
We told yesterday how leaders of Edinburgh’s joint SNP-Labour administration unveiled proposals which could see existing tax bands “decoupled” so larger levies can be introduced for more expensive properties.
Council tax is currently set at eight different levels, with charges in each band tightly related. Local authorities only set the Band D level, meaning the others are determined as a proportion of this.
The Scottish Government’s flagship policy of a council tax freeze means rates have not increased since 2007, and they remain fixed for 2016-17. However, city bosses said they were “optimistic” of securing power from ministers to make the system more “flexible and progressive”, allowing tax rises to be focused on those whose homes are more expensive. It is hoped this will generate much-needed additional income amid a push to save at least £147 million over the next four years.
Opposition figures have criticised the proposed change.
Councillor Iain Whyte, Conservative member for Inverleith, said: “This smacks more of the politics of envy than a carefully crafted plan to bring stability to local government finance. You are likely to see people flee across borders, which itself causes all sorts of economic difficulties.”
Faisal Choudhry, Savills head of research in Scotland, said: “The Edinburgh market is still adjusting to the new land and buildings transaction tax (LBTT) which was introduced in April last year.
“This progressive tax, which replaced stamp duty, is already placing a higher burden on the mid-market upwards. LBTT is making Edinburgh relatively expensive, compared to other UK regions. The [proposed council tax change] would be a further challenge for buyers.”
But Green councillor Gavin Corbett said he was “heartened”, adding: “In every other capital city in Europe, the local council has greater say over income and expenditure than in Scotland. Edinburgh deserves better.”