FINLAND AUCTION RESULTS: ORI Operation

Large Gilt Block trade, suggest seller:

• G Z5 2.25k at 93.36.

• The Mail on Sunday (link here) reports that a "mansion tax" is under consideration. This is said to be set at an annual levy of 1% for the amount that a property price exceeds GBP2mln. So a GBP2.5mln property would have a GBP5k annual charge, a GBP5mln property a GBP30k annual charge etc.
• The advantage to this over other wealth taxes is that property wealth is difficult to hide and cannot move out of the country.
• The obvious disadvantage is that this has implications on the housing market and pushes house prices down (and more widely distorts the housing market).
• There are also large regional variations - so a GBP2mln property in London may not be seen as a "mansion" in a lot of people's eyes - whereas a GBP2mln property in rural Wales of Scotland would be seen very differently.
• It is also very difficult to accurately price these properties - one of the reasons that council tax is currently conducted in bands.
• Amongst the critics are former BOE Governor, Lord King who has said that the government lacks a "coherent strategy" on the economy (Sky News).
• Alternatives to the plan include adding more bands to council tax (on top of the current A to H). And have the top bands pay a vastly increased rate. However, this would then be collected by councils rather than via the Treasury - and would therefore require further council redistribution. This would, however, reduce the need for frequent revaluations.
• The IFS has previously estimated that introducing a council tax band which was 12x band A would raise GBP3.6bln. We haven't seen any explicit costings for the new mansion tax plans.

ERX5 97.9375/97.875ps, bought for 0.5 in 8k.