Local Agent Says Mansion Tax Could Hit Thousands of W4 Homes
Labour candidate backs scheme as way to find funding to protect NHS
The Labour party proposal to levy a 'mansion tax' on homes valued at more than £2 million could affect thousands of homes in the Chiswick area according to one local agent. Another has suggested that if the tax was to come into effect it could turn Bedford Park into 'bedsit land'.
Christian Harper of Harper Finn in Chiswick said he estimated about 2,500 homes in Chiswick would liable for the tax which he described as a headline grabbing opportunity for Labour and unrealistic.
He said, "I don’t think that Labour have considered the majority of people that own such houses. Most bought the very same houses for less than £100,00 years and years ago, they might not afford £11,000 quite so easily. My parents bought a house on Park Road, W4 in 1967 for £9,000 and its now worth close to £3 million. They have no intention of selling it and live on a small pension. £11,000 would significantly change life for them on a day to day basis. Are my 80 year old parents who Mr Miliband and our local Labour MP want to target? If not, I suggest that he reconsiders his proposal."
According to the Land Registry there have been 166 transactions of over £2 million in the W4 post code area.
Labour Party leader Ed Miliband announced the proposal at the party conference last week saying the tax would provide an investment of £2.5 billion to the NHS by 2020, employing an extra 36,000 doctors, nurses, midwives and carers.
Labour's Parliamentary Candidate for Brentford & Isleworth, Ruth Cadbury, has backed the plans saying, "I think it's right that those who are better off should pay to support those who are poorer. We need to find the funding to protect the NHS and a mansion tax is one way of doing that".
However she added there should be protection for those who were not able to afford the tax. She added, "If someone's living in a large home on a low income we need to address the council tax support system to ensure they're not penalised."
Another estate agent commented, "In Chiswick this isn't a mansion tax but a 'family house tax'. There is a chronic shortage of 5+ bedroom properties in Chiswick because of the perverse planning policies of successive governments.
"If the tax is implemented every one of these homes that comes onto the market will be bought by developers for division into flats further exacerbating the lack of family houses. People with long memories will know that, in the fifties and sixties, Bedford Park was known as 'bedsit land' and wasn't a particularly desirable area to live. In the longer term it will revert to that if this daft tax is ever implemented."
Estimates vary on how many homes would come into the mansion tax across the UK. Some have put a catchment of between 58,500-110,000 homes, ranging from country houses with acres of land, to London flats. Over 80% of property valued at over £2 million is in London or the South East.
Christian Harper says that Kate Barker, a former member of the monetary policy committee and former advisor to the Labour government, was quoted in The Guardian that the mansion tax would need raise £11,000 per home to meet Labour's fund raising targets. He suggested it would be fairer to have Council Tax adjusted by amending the 1991 Rating Values. For example, he said a new-build house worth £1.3 million in Chiswick might pay more in tax than a Victorian six-bed house worth £2.6 million around the corner because the new house was given a higher value in 1991.
At present, council tax bands are still based on valuations of homes made in 1991. The Institute for Fiscal Studies recently said that rather than adding a mansion tax, it would be better to reform council tax to make it proportional to current property values.
Some housebuilders and estate agents fear that any mansion tax will curtail building of new homes in London and the South East of England, where a shortage of supply has been one of the factors pushing up prices.
Some years ago, the Liberal Democrats proposed a mansion tax based on 1 per cent of a property's value over £2 million. This meant a property worth £3 million would have faced a charge of £10,000 a year. The proposed scheme was widely unpopular and was dropped.
The Labour Party has said this would be a progressive tax so that with the biggest homes would pay more than those with homes just above the £2 million threshold. They say there would be protection for those on low incomes in these houses -this could mean the option of paying the charge from their estate when they die.
September 27, 2014