£1bn mansion tax would slam London & the South East
3rd Dec 2009
- 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|
|Belgravia & Pimlico(SW1)||£79,894,177||7.6%||£1,316,300|
|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|
* 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%|
|Hammersmith and Fulham||£132,019,132||12.59%|
* Source: Zoopla.co.uk
|Region||% of Tax Take||Average property value (Dec 09)*|
|East of England||2.1%||£220,606|
|Yorkshire and The Humber||0.2%||£141,381|
* Source: Zoopla.co.uk
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Notes to editors
Zoopla.co.uk is a unique property website offering users information and tools to help them make better-informed property decisions. Our aim is to provide the most comprehensive source of residential property market information in the UK to help buyers, sellers, owners and estate agents alike and give them an advantage in the property market.
In 2007, following the success of bringing DVD rental to the web with LOVEFiLM.com, Zoopla founders Alex Chesterman and Simon Kain realised that the UK property market had yet to fully enjoy the benefits of the internet in terms of its ability to deliver transparency and efficiency. They set out with the mission to transform the property market for both professionals and consumers by:
- offering users FREE access to instant value estimates, sold house prices and local information and trends
- enhancing estate agents' marketing efficiency by providing exposure/leads on a pay-for-performance basis
- helping users find local agents and other property professionals to assist them in the transaction process
- letting buyers make offers on ANY UK home and owners test interest in their homes before choosing to sell
- creating an environment where anyone can ask/answer questions and share their knowledge about homes
By providing FREE value estimates for EVERY UK home, sold prices and local information as well as hundreds of thousands of property listings for sale/to rent, Zoopla.co.uk is fast-becoming the ultimate destination for users to both search for property and to do their market research. We continue to be the UK's fastest growing property website and largest and most active property community, with over a million user contributions to our website in the past 12 months alone. We also offer unique features, like TemptMe. and AskMe., which allow consumers to gain an insight into the market and discover information they won't find anywhere else. Our estate agent directory, FindAnAgent and our unique AskAnAgent feature also help guide users to local professionals directly for their expertise.
Our value estimates are calculated using a proprietary algorithm (secret formula) that we have developed by analysing millions of data points relating to property sales and home characteristics throughout the UK. The algorithm works by comparing relationships between home prices, economic trends and property characteristics in given geographic areas. Our estimates are constantly refined, using the most recent data available and a variety of statistical methodologies, in order to provide the most current information on any home.
Zoopla Limited is a privately held company with a highly experienced and proven management team, backed by well-respected angel investors and leading venture capital firms Atlas Venture (atlasventure.com) and Octopus Ventures (octopusventures.com).