£1bn mansion tax would slam London & the South East
80% of tax burden would fall on London with further 11% on South East
Four London boroughs would pay 60% of UK total
32,500 households would be hit
Average tax bill per household would be £32,700
The Liberal Democrats' proposed mansion tax on £2m properties would raise £1.05bn and hit 32,500 homeowners, according to new research from property website Zoopla.co.uk. The website analysed all the properties in the country valued over the £2m threshold and calculated how much tax would be raised.
On average each homeowner would pay £32,700 per year, with those just above the threshold paying £20,000 while those with more expensive homes paying much more.
The tax would be a hugely skewed to homeowners in London and the South East. 91% of the tax take would be paid by homeowners in these two regions, a massive £955m. All the other regions put together would pay the remaining £95m between them.
Astonishingly, 10% of the total national tax take would come from just one district in London - Holland Park. The top ten areas, all of which are in just four London boroughs, would account for over half (54%) of the UK mansion tax yield, a total of £567m. Kensington & Chelsea, Westminster, Hammersmith & Fulham, and Camden would together pay 61% of the UK total, with Kensington & Chelsea alone paying almost a quarter (24% or £252m). Overall, Londoners would pay 80% of the UK total.
Nicholas Leeming, commercial director of Zoopla.co.uk said: "The £1.05bn that would be raised from this tax is some way short of the £1.7bn mooted. The Libdems have overestimated how many properties are still worth that much money. Nevertheless, it is a large sum of money to be paid by a small number of people.
He continues, "Property in London and the South East is already the most highly taxed in the country. Stamp duty thresholds and inheritance tax already discriminate against those who live in these two regions. The Libdems' so-called mansion tax would slap another huge bill on the same areas at no political cost to themselves given the low levels of support they have in these areas. To expect residents of just four local authorities to stump up £640m in tax while most of the country escapes scot free is an outrage.
"The mansion tax would hugely distort the housing market around the £2m threshold and cause sharp price falls in a broad band up to £2.5m. A few extra pounds on the purchase price taking a property over £2m would saddle the buyer with a tax bill of £100,000 over the course of a Parliament. Even for comparatively wealthy families, that's a huge sum to find."
Top ten payers by area
Area | Tax Take | % of national tax take | Average property value (Dec 09)* |
|---|---|---|---|
Notting Hill (W11) | £103,822,923 | 9.9% | £1,049,394 |
Kensington (W8) | £84,750,654 | 8.1% | £1,535,105 |
Chelsea (SW3) | £80,919,569 | 7.7% | £1,231,691 |
Belgravia & Pimlico(SW1) | £79,894,177 | 7.6% | £1,316,300 |
Hampstead (NW3) | £49,031,512 | 4.7% | £828,245 |
South Kensington (SW7) | £46,687,817 | 4.5% | £1,232,470 |
St Johns Wood (NW8) | £41,141,278 | 3.9% | £801,388 |
West Brompton (SW10) | £34,785,326 | 3.3% | £976,756 |
Mayfair (W1) | £25,973,659 | 2.5% | £783,550 |
Camden (NW1) | £22,026,221 | 2.1% | £570,277 |
TOTAL | £569,033,136 | 54.3% |
* Source: Zoopla.co.uk
Top 5 payers by local authority
Local Authorities | Tax Take | % of UK tax take |
|---|---|---|
Kensington and Chelsea | £255,191,025 | 24.33% |
Westminster | £178,889,062 | 17.06% |
Hammersmith and Fulham | £132,019,132 | 12.59% |
Camden | £71,621,824 | 6.83% |
Wandsworth | £29,421,326 | 2.80% |
* Source: Zoopla.co.uk
Regional breakdown
Region | % of Tax Take | Average property value (Dec 09)* |
|---|---|---|
London | 79.5% | £384,993 |
South East | 11.5% | £261,904 |
East of England | 2.1% | £220,606 |
South West | 1.9% | £212,388 |
Scotland | 1.7% | £157,336 |
Northern Ireland | 1.4% | £220,360 |
North West | 0.9% | £153,315 |
West Midlands | 0.5% | £169,005 |
Yorkshire and The Humber | 0.2% | £141,381 |
East Midlands | 0.2% | £156,954 |
North East | 0.1% | £157,285 |
Wales | 0.1% | £148,257 |
* Source: Zoopla.co.uk
- Ends -
About Zoopla
Hello. We're Zoopla. A property website and app.
We know you're not just looking for a place to live. You're looking for a home.
Yeah, we've got over a million properties for you to browse.
Tools that let you filter them in all kinds of clever ways.
And reliable house price estimates, so you can be sure you aren't paying over the odds.
But we know you're looking for more than that.
Because that first flat won't just be a 'great investment opportunity'.
It'll be the feeling of starting out on your own.
That extra bedroom won't just mean another £20K on the re-sale price, it'll mean having your sister over to stay.
And that bungalow won't just be a way to release some equity, it will be a chance to spend more time with the grandkids.
We know that searching for a home is about more than just checking its price, location and features (important as all those things are).
What really matters is how it makes you feel.
We know what a home is really worth.
So let us help you find yours.
Zoopla is part of Zoopla Limited which was founded in 2007.
Zoopla Limited, The Cooperage, 5 Copper Row, London, SE1 2LH Registered in England and Wales with Company No. 06074771 VAT Registration number: 191 2231 33 Data Protection number: Z9972266