Mansion tax plans proposed by Labour have the potential to create more than £1.6bn in extra tax revenue per year, says a new report from Zoopla, but around 96 per cent would come from homeowners in London and the South East.
After analysing all properties in the UK now valued at over £2m, Zoopla found that more than 108,000 households would be liable.
"The introduction of a ‘mansion tax’ would disproportionately penalise homeowners in London and the South East who are already responsible for the vast majority of property tax take in the UK," said Lawrence Hall of Zoopla.
"With more than 100,000 homes to be affected by this new levy, it is somewhat misleading to call it a 'mansion tax' when many three bed family homes in London and the South East would find themselves caught by it."
Peter Rollings, CEO of estate agent Marsh & Parsons, said that the proposals would 'injure' London’s international business reputation as well as potentially 'stifling' the property market. "Any policy initiatives should concentrate on nurturing the embryonic buds of growth outside of London, rather than drastically pruning back healthier branches of the market," he said.
Property investment specialist Stuart Law, CEO at Assetz, said that the tax would 'bash the recovering property market'.
"The UK’s regional cities are beginning to flourish from the London prosperity ripple effect which is great news for local economies," he said. "While the spread of property millionaires is more concentrated in the South East, Ed Miliband must not stymy regional growth potential with this ill-thought-through plan. How will it be implemented?
"Introducing a mansion tax is just fudging the issue of a more important and urgent policy to build more homes and the resultant jobs that will create across the property industry. This seems a better way forward and one that will have a stabilising effect on house prices for homeowners of properties in all price bands and could just be more popular with voters."
Nick Leeming, Chairman of estate agents Jackson-Stops & Staff, added that what he called the 'Downton Abbey' view of politics was 'distorting the realities of who own homes in the £2m plus bracket'.
"This will affect people all over the country, not just in London where the market has been most buoyant. Many owners are people who have worked hard throughout their working lives and have been in their homes for many years or those who have invested in their home to provide a secure retirement. Many are asset-rich and income poor and the threat of a mansion tax would force these people to sell up," he said. "A council tax would be a much fairer way to raise income, with a revaluation of the whole system and extra bands introduced."
Commenting on other aspects of Ed Miliband's speech today at the Labour Party conference, David Orr, chief executive of the National Housing Federation, said: "We really welcome the 10 year commitment to get house building moving and to invest in delivering new homes, but even 200,000 a year by the end of the next parliament won’t be enough after decades of building less than half of the homes we need.
"We’re calling on all parties to commit to end the housing crisis within a generation. To end the crisis all politicians need to raise their sights and commit to the numbers of new homes that will genuinely meet the need that now exists."Reuse content