THE MP for East Hampshire is fighting moves which could see local tax bills for an average home in the district rocketing to £2,888 a year. Michael Mates is dismissing the proposed new house- price tax as an "attempt to cynically tap into" the rise in property values in recent years. And the long-serving MP is convinced homeowners in the area will be hit hard if the scheme is implemented. He said: "Families and pensioners, who have saved and improved their homes, face the threat of soaring tax bills, without any improvements in their local services. "Just because house prices have risen, doesn't mean that local residents can afford even higher local taxes." The proposal, a joint scheme by Labour and the Liberal Democrats, calls for taxing "unearned economic rent" to "stabilise the property market", copying the Danish system of a "national one per cent property tax". This, according to Mr Mates, would be on top of plans for a new local income tax of up to five per cent on both basic and higher rates of income tax. The house-price tax is due to be introduced in the UK in April 2007, in Northern Ireland. Residents will be hit with a charge of 0.63 per cent of their home's value every year. Local taxes in the province are currently lower than in mainland Britain. Mr Mates added that Gordon Brown's review of town-hall finances was actively considering how to implement such a scheme across Britain. Under a one per cent house-price tax, he said, the average property in East Hampshire would pay a bill of £2,888 a year. "I am concerned that both Gordon Brown and Menzies Campbell are actively planning to introduce a house-price tax, to cynically tap into the rise in property values in recent years," said Mr Mates. "Many people are already struggling to meet the rising cost of mortgages, utility bills and local taxes. "I doubt that these Lib-Lab plans for hefty tax bills will be welcome on East Hampshire's doorsteps." The finance officer at East Hampshire District Council, which collects council tax, said he had not been contacted about such a proposal. Bill Price added that a proposed government report to local authorities had yet to be released. He told The Herald: "We have not received any information by way of seeking our views, but having heard about it, I will be able to make enquiries."
