Mansion Tax data highlights increase strain on homeowners
Zoopla have released research figures, showing breakdown of the effects the proposed mansion tax could have on homeowners regionally. The data highlights an increased burden the tax reform could have on London and South East residents, who would be accountable for nearly 96% of the overall revenue.
Lawrence Hall of Zoopla says,
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.
The so-called “mansion tax” plans Labour have been in support of would be enforced on more than 108,000 properties across the UK, that are currently valued at £2 million and over. Such a change is estimated to cause a fluctuation in tax revenue in excess of £1.6 billion annually, according to Zoopla.
Each of the affected households would be paying an average of £15,000 each year, with London and the South East being hardest hit. These regions are expected to cover 95.9% of the total revenue, with the rest of the UK covering the remaining 4.1% (£66 million).
Hall made an interesting point, commenting,
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.
Unsurprisingly, the areas with the greatest burden would be the affluent Kensington and Chelsea, as well as Westminster. Tax payers in these areas alone would be expected to cover over half of the UK’s total property tax revenue.
Stuart Law CEO of financial services provider, Assetz thinks altering tax structure would have a negative effect on the recovering property market. He also feels the Government should be focussing efforts on developing policies to build more homes, saying
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.
Do you think the “mansion tax” reform will boost or hinder the property market? Is it a fair system for all homeowners?
All figures featured have been sourced from Zoopla.