Home Residential Property Ministers: We need more London homes for super-rich to protect tax take

Ministers: We need more London homes for super-rich to protect tax take

by Asa
6th Mar 13 9:44 pm

Government ministers have called for more homes for the super-rich in London as the capital’s position for attracting the wealtheist is under threat.

The news comes as New York overtook London as the top place for the world’s richest people to live and own property, according to new research by property experts Knight Frank.

In the “Wealth Report” survey of 15,000 multimillionaires by Knight Frank and WealthX, the mansion tax, the bank bonus cap and Eurozone uncertainty undermined London’s attractiveness.

The report listed the top 10 global cities as New York, and then London, Paris, Tokyo, Hong Kong, Singapore, Sydney, Washington, Toronto and finally Zurich.

Ministers have told the Evening Standard that they are concerned that action needs to be taken to keep tax revenues from wealthy individuals in the UK and are considering solutions like allowing more expensive developments at prime central London sites.

A minister said: “Most people have no clue about the huge sums of tax that are paid by a small number of extremely rich people in London. If we could attract another 10,000 of these people, it would make the spending round a lot easier.”

The top earning 31,000 people in Britain are estimated to pay £14.8bn in taxes, more than the entire income tax bill paid by 13.6 million people on £20,000 or less, who contribute in total £13.9bn.

Institute for Fiscal Studies chief Paul Johnson said:

“We are very dependent on that small group of people for a large amount of tax revenue. If you have £1m of income you will be paying more than £400,000 in income tax. Someone on average earnings of around £25,000 pays around £3,000 in income tax — so you need an awful lot of them to match the tax paid by one of the small number of very high earners.”

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