The Office for Budget Responsibility’s own detailed costings of Reeves’ new Mansion Tax predict 40% of appeals against property valuations will be successful. Introducing a new band with re-evaluations will be utter chaos…
The OBR has put out supplementary forecast information on the new tax this morning. The forecaster predicts the Treasury will lose £275 million in lost stamp duty, capital gains tax and inheritance tax receipts before the Mansion Tax even begins to collect £400 million per year subsequently. It says there will be a “reduction in the new-build rate for properties above the threshold.” It also suggests behavioural responses from consumers will destroy a third of the projected tax receipts…
The OBR assumes a 20% valuation appeal rate with 40% of those appeals being successful, which takes 4% off total revenue. Reeves’ shoehorned support scheme for households earning under £30,000 also reduces receipts by 9%…
In addition the OBR’s costings are based on automated valuations. There has not been a new valuation round since 1991. It rates the policy as highly uncertain. For its part the Valuation Office Agency has still not got its ducks in a row. Information obtained by Guido shows the VOA has not developed resourcing or recruitment plans for the Mansion Tax and says “a minority” of the 1,000 new recruits to HMRC will be assigned to it. More effort than it is worth…
