Mansion tax and leaving Fitzrovia

Local resident and television presenter Griff Rhys Jones has drawn criticism after he said he would leave the UK if Labour win next year’s general election and bring in a mansion tax. Rhys Jones made the comment in an interview in the Telegraph newspaper ahead of a series of programmes he is presenting about the National Trust in Wales to be broadcast on BBC Four starting this week.

Page from Telegraph newspaper.

Griff Rhys Jones: “I mustn’t equate my own personal angst about the mansion tax with a national policy angst. No way. It’s quite likely that the population is very keen on seeing rich people squeal. So I’m not going to squeal to make them feel better.”

In the interview published on Monday Telegraph journalist Matthew Stadlen writes: “His Fitzrovia house has appreciated so significantly that he is contemplating moving overseas if Labour win the election and introduce a mansion tax”. In the interview Rhys Jones is reported as saying his house in Fitzroy Square was a “slum” when he bought it.

The house cost £1,450,000 in 1998 and is now estimated to be worth about £7,000,000.

Stadlen quotes Rhys Jones as saying: “It would mean I’d be paying the most colossal tax, which is obviously aimed at foreigners who have apparently come in and bought up all the property in London. That sounds about as fatuous an idea as that immigrants are stealing all the jobs. I’d probably go and live abroad because I could get some massive palace which I could restore there”.

While a mansion tax is not to his liking he thinks most people would welcome it: “I mustn’t equate my own personal angst about the mansion tax with a national policy angst. No way. It’s quite likely that the population is very keen on seeing rich people squeal. So I’m not going to squeal to make them feel better,” he said.

Local resident, author and playwright Bonnie Greer criticised Rhys Jones for his remarks about tax. She commented on Twitter saying: “I live in the same area as Griff Rhys Jones who might leave us [because of the] mansion tax. Fab. He can leave that pile of his in Fitzrovia Sq to charity.” Richard Osley in the Camden New Journal reported on this.

Rhys Jones was also the subject of an opinion piece in the Mirror and he was parodied in the Guardian where he was compared to Phil Collins, Paul Daniels and Andrew Lloyd Webber who had all promised to leave the country in the past if Labour were elected.

But the most comprehensive and articulate criticism so far has been from writer and land activist Andy Wightman who says in a blog post that the Rhys Joneses have seen their property rise in value since 1998 to make them a “£4.5 million tax-free capital gain without any effort”.

In Wightman’s view: “The inflated price of houses in many parts of the UK is a consequence of scarcity and a lax fiscal regime. The financial gains made by homeowners are only in very small part due to their own efforts (for example, insulating or other improvements). The vast majority of the gains are as a consequence of rising land values.”

In Fitzrovia — where there are great disparities of wealth — the majority of homes are rented and their occupants don’t welcome the rising land values as it leads to increased rents. Many residents have been priced out or evicted as the area has become increasingly gentrified.

Wightman argues that Labour’s plans don’t go far enough and that council tax needs to be reformed to make it proportional to current property values, as suggested by the Institute of Fiscal Studies. With the current system of council tax higher-value properties are significantly under-taxed.

“If property taxation was properly proportional and the Rhys Joneses paid the percentage rate (1.85%) that a mid-point English Band D property is liable for, then they would be paying £129,724 per year. The Mansion tax is liable to be about a tenth of that.

“That kind of liability would deter most buyers who, as a consequence would offer less for the property so as to pay less in annual holding costs – which is precisely what a well-designed system of recurrent property taxation would do. Lower property prices means less indebtedness and more resources invested in the productive economy. But that is not the kind of economy that either Labour of the Tories appear to be interested in,” says Wightman.

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