“It seems the concept of a mansion tax won’t go away” says James Greenwood of Stacks Property Search. It was last suggested by the Labour Party who proposed a land value tax on property valued at over £2m. It didn’t go down well then either!”
“While property all over the country, and of many different types would be affected, any mansion tax would hit London and the south east hardest. For high net worth overseas buyers, and investment purchasers, the tax would be unlikely to cause great concern. The costs would simply be factored into the general investment equation. It may however have some impact on the rental market as investors seek to offset the tax.
Sara Ransom of Stacks Property Search says, “Property owners who would be hardest hit include:
“Existing owners of property that has grown in value to the £2m threshold. Domestic residents, especially those who are retired and have lived in their homes for decades and are equity rich but cash poor, may not have the liquid wealth to match the value of their property and may be forced to sell.”
“Working families in London where property over £2m is commonplace. This sector is often working hard to pay substantial mortgages and there is little spare cash for an additional onerous tax.
“The likely ramifications of the introduction of such a Tax is that more residents would be driven out of London, and the capital would continue its trajectory to becoming a city owned entirely by investors and wealthy foreigners.”
James Greenwood says, “The small percentage of out-of-London property owners that would be affected by a mansion tax could also be driven out of their homes, properties that have often been in the family for generations. This would inevitably lead to some ‘freeing up’ of the huge country houses and estates which have been kept in the family for many years.
“Our view is Johnson should leave well alone. Maybe Rishi Sunak will have different ideas to Javid and the Mansion Tax will be kicked back into the long grass. But if it is introduced, we believe that concessions should be introduced alongside it for those in the ‘at risk’ categories, factoring in length of residency, use of capacity, and income thresholds.”
Stacks Property Search, 01594 842880 / www.stacks.co.uk
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