| 7.2°C Belfast

Miliband proposes 'mansion tax'


David Miliband

David Miliband

David Miliband

Owners of homes worth more than £2 million should pay an annual "mansion tax" to help the poor, a Labour leadership contender has said.

Shadow foreign secretary David Miliband said the levy would raise £1.7 billion to restore housing benefit for the least well-off.

The proposal - outlined in an interview with the Evening Standard - appears designed to drive a wedge between the coalition partners, as well as appealing to Labour grass roots.

Business Secretary Vince Cable put the idea in the Liberal Democrat General Election manifesto - but it was lost during negotiations with the Tories.

Under the plan, owners would have to pay a 1% levy on a property's value above £2 million.

A home worth £3 million would pay a minimum of £10,000 extra a year, while a home worth £4 million would pay £20,000.

Mr Miliband said the money raised would allow Labour to reverse the coalition's proposals for slashing housing benefit costs by cutting the current rates paid on behalf of tenants.

"We've calculated that a mansion tax of 1% on homes of more than £2 million would more than cover the money that they claim to be saving from housing benefit reforms," he said.

(Evening Standard)