Lib Dems in 'portfolio tax' plan

Owners of holiday homes and rental properties would be drawn into paying a "mansion tax" under Liberal Democrat proposals to extend the policy beyond £2 million main residences.

At internal policy consultation has concluded there "may be merit" in imposing the 1% levy instead on anyone with a land and property portfolio worth above the same threshold.

The document, to be debated by activists at the party's spring conference next month, includes a number of radical options, including a French-style wealth tax on assets such as jewellery and paintings.

Extending the mansion tax was reported to be favoured by some within the party as a vote-winner in the South West where there is anger over second-home buyers forcing up prices.

But senior figures are also believed to have concerns that the move - in a package drawn up as part of preparations for the 2015 general election manifesto - could see some people taxed twice. Landlords already pay tax on any rent they receive.

The proposals emerged as Labour - which this week backed the idea of a mansion tax to fund the return of a 10p income tax rate - challenged the Lib Dems to support it in a Commons vote.

The party played down the prospect of it adopting the idea of a "net wealth tax" - which would involve tax inspectors visiting people's homes to verify the value of declared items such as jewellery and paintings.

MP Tessa Munt, one of those who helped draw up the consultation paper, told the Mail on Sunday it was an "interesting idea" and would be put to activists in Brighton.

But the document says it would be "generally quite complex to administer" and party Treasury spokesman Stephen Williams said he expected it to be "firmly spiked" by activists.

A Lib Dem spokesman said: This consultation is part of the process of asking for ideas on how to ensure a fairer tax system. It is up to Lib Dem party members as to whether these eventually become party policy."