Party funding: Tory coffers benefit from donors' fears of Labour mansion tax

Elite property developers have, for the first time, donated nearly £1m

Oliver Wright,Solomon Hughes,Jamie Merrill
Sunday 07 September 2014 08:38 BST
A Regent’s Park mansion on Chester Gate, which is one of London’s most expensive properties
A Regent’s Park mansion on Chester Gate, which is one of London’s most expensive properties (Rex)

High-end property developers, whose profits could be hit by a mansion tax, are bankrolling the Conservative Party to the tune of almost a million pounds, an investigation by The Independent on Sunday has found.

Electoral records show that in the past two years, property companies have begun donating to the Conservatives for the first time – contributing just under £800,000 to party coffers.

This is on top of a number of other companies and individuals connected with London's booming high-end residential property sector, who have always supported the party and some of whom have recently upped their donations.

The scale of donations underlines fears in the industry that a future Labour government or Lib/Lab coalition would impose punitive taxes on top-end property, triggering a market slump. Residential property companies and their owners now appear to be the biggest financial supporters of the Conservative Party after the financial sector, and will be crucial to helping the Tories to outspend Labour next year.

Shadow Chancellor Ed Balls has suggested a mansion tax would be levied on all properties worth more than £2m. The party hopes to raise up to £2bn a year from the tax.

Ed Balls
Ed Balls (Getty)

Labour said the revelation about the Tories' new property donors showed just how far the party had become "bound by vested interests". Vince Cable, who first proposed a mansion tax, said it showed the problems of the housing market "won't be fixed by those who look after their own". The Conservatives declined to comment.

Among the new donors is Glentree International, a London property company that has sold more than £3bn of real estate to clients including Britain's richest man, Lakshmi Mittal, Saudi princes, Bernie Ecclestone and a number of Russian oligarchs. Glentree's founder and chief executive, Trevor Abrahmsohn, makes no secret of the fact that his company's donation of £12,650 to the Conservatives last year was connected to the mansion tax and he intends to give more money in the run-up to the election.

Other people in the industry felt the same way, he added. "The mansion tax should worry everyone.Already the number of transactions in the mansion tax type area is down outside the centre of London by 70 per cent and central London is flatlining. If [Labour wins and introduces a mansion tax] there will be a collapse in the property market which will start at the top and cascade down. And before you know it you will have a property market which is in recession by self-engineered means. That is the biggest own goal that any country could commit," he said.

David and James Reuben
David and James Reuben (Rex)

Another new donor is the Topland Group, one of the largest privately owned international property investment groups, which has given £50,000 since July 2011. A spokesman for Topland said: "Clearly there is a reason for the donation and the mansion tax is a big issue. There is a perception that Labour will not have the interests of real estate close to their minds so it is more appropriate for companies like ours to support the Conservatives."

Another company that has recently started giving significant sums to the Conservatives is Marcus Cooper Property Consulting, the developer behind one of Britain's most expensive homes, a Regent's Park mansion. Marcus Cooper has given £150,000 to the Tories since April 2013. No one from the company was available to talk about its donations.

And it is not just property firms. Leading property individuals have also made significant donations. Donors include Bruce and Shadi Ritchie who have given the Tories £165,000 since 2013 and jointly own Residential Land Ltd that buys and rents property in what it describes as some of the "most exclusive postcodes in central London". The holding company of Residential Land has given £64,000 since February 2012.

Yesterday a spokeswoman for Mr Richie said she did not know why he had stepped up his donations to the Conservatives, but added that she did not think it would be connected to the threat of a mansion tax.

Lakshmi Mittal
Lakshmi Mittal (AP)

Other property donors include DPK Contractors, a high-end residential development manager that has given £71,776 since September 2013; Delancey Real Estate Asset Management, which was involved in developing properties around the Olympic site and has given £90,000 since 2011; and London and Regional Properties, which gave £25,000 in August 2012. Individual donors include Roger Orf, head of Apollo Global Management's real estate business in Europe. Apollo is in partnership with Residential Land to "exclusively acquire prime London residential property with an initial investment of over £100m". Mr Orf has given the party £80,300 since July 2013. He was not available for comment.

The party also received money from James Reuben, son of David Reuben whose company recently bought a former gentlemen's club on Piccadilly with plans to turn it into Britain's most expensive home. Mr Reuben has given £35,000 since 2012, but a spokesman said he was not involved in the part of the business that is involved with high-end residential property.

Labour MP Sheila Gilmore said: "Is it any wonder that the Tories won't support Labour's call for a mansion tax to cut taxes for working people when they are funded by developers who would be set to lose?"

A Conservative spokesman said: "All donations to the Conservative Party are fully permissible and declared to the Electoral Commission."

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