Marsh & Parsons

Peter Rollings, CEO, Marsh & Parsons
Peter Rollings, CEO, Marsh & Parsons

Peter Rollings, CEO of Marsh & Parsons, comments:  “The only spanner in the works for the UK housing market now could be undue government interventions. Labour’s Mansion Tax proposals would not only injure London’s international reputation and prestige as a city open for business and investment, but would lumber the capital’s homeowners with an even weightier tax burden and potentially stifle the 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.”

Jackson-Stops & Staff

Labour’s pledge to introduce mansion tax will hit the Carsons of this world rather than the Lord Granthams, according to Nick Leeming, Chairman of national estate agents Jackson-Stops & Staff, with 44 offices nationwide.

Nick Leeming said: “The Downton Abbey view of politics is 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. “A council tax would be a much fairer way to raise income, with a revaluation of the whole system and extra bands introduced.”

  • Almost 96% of the mansion tax burden absorbed by London and the South East
  • More than 108,000 households nationwide would be affected by the proposed tax
Not exactly a row of mansions but theses properties could come under the Mansion Tax
Not exactly a row of mansions but these properties could come under the Mansion Tax

The mansion tax plans proposed by Labour could create more than £1.6bn in extra tax revenue per year, but almost 96% of this burden would be placed on homeowners in London and the South East, according to leading property website Zoopla.

After conducting analysis of all properties in the UK currently valued at more than £2m, Zoopla found that in excess of 108,000 households would be liable for the annual levy, at an average of £15,000 each.

Properties in London and the South East would account for the vast majority (95.9%) of the additional £1.63bn cost with the rest of the country contributing just 4.1% (£66m) of the total contribution.

Lawrence Hall of Zoopla said: “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. 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.”

According to Russell Quirk, CEO of online estate agent “The well-heeled will bemoan it as a ‘rob the rich to help the poor’ levy on all properties with a value of £2m or more. The middle classes are gasping at the re-announcement by Labour of another property tax, itself a regurgitation of a Lib Dem announcement from three years ago. All a bit higgledy piggledy and designed to appeal to the left of the political spectrum at a time of much vote grabbing generally.

“But it’s altogether unfair. Home values across the UK vary widely. Indeed they vary considerably within just the same county. A large five bedroom Victorian house in mid-Essex, for example might be worth £1m. Half an hour up the A12 in Halstead, it’s worth half that. Why should one house, the same as another, attract a penalty but the other not? Of course we can have the debate about ‘rich people deserving to be taxed higher’, higher than the 45p top rate that they doubtless already pay and after the heightened stamp duty that they have forked out on their more expensive purchase too.

Financial pressure

“Taxing property wealth is the bluntest of instruments. There is often a rift between the value of a property, perhaps owned by a surviving widow or widower or family member. They potentially bear little relation to the amount of money available to them in liquid cash terms. Tax the bankers and the market speculators perhaps, maybe even more on cigarettes and alcohol? But to increase the financial pressure on someone because of the home that they have worked hard for or have been left with, is just spiteful.

“The biggest problem with Mansion Tax potential is who will set the value of each property? How much will the valuation process cost us, the weary tax payer? What mechanism will be put in place to oversee the appeals process, because there will be many appeals and how much will that also cost? What will happen if values go down? What measure will be used to prove that decline and over what period will a reduction in cost be scrutinised over before it is ‘accepted’?

A Mansion Tax would be unfair and draconian and not least, just as expensive to collect as any income it brought about.”