Mansion tax is an “annual service charge” on the South East

Within London’s 81% share:

40% in Kensington & Chelsea
 
20% in City of Westminster (which together cover large part of prime central London so just under ½ of all homes worth £2 million or more are in Prime Central London)
 
13% in Camden
 
4% in Barnet
 
4% in Richmond

Liam Bailey, head of research at Knight Frank, said: “Those who own a home valued in this bracket have already paid substantially more stamp duty than other segments of the market.

“This is especially the case if they have bought their home since April last year, when stamp duty was raised from 4% to 5%, increasing the bill for the purchase of a £2 million home by £20,000 to £100,000.

"The latest official figures, which do not include last year’s substantial uplift in stamp duty, suggest that those buying homes worth £2 million and above paid around 17 per cent of the total stamp duty tax revenue raised from residential transactions in 2010/11, despite making up just 0.5 per cent of total transactions. 

“In light of this, to ask all of these homeowners to pay an effective annual “service charge” to the Treasury seems like a penalty. This will certainly feel like the case for those living in high value homes who have modest levels of annual income.”

“The issue of valuation is also a thorny one – to suggest that the value of properties has risen across the country in a uniform manner is thoroughly misleading. The last few years has seen the rise of local markets that have performed very differently across counties, let alone regions. And this ignores the fact that properties in this price bracket can fluctuate; so regular reviews – and all the expense that is attached with that process – would have to be established. 

“As it stands, this proposal very much looks like being an additional tax on property in London and the South East.”

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0 thoughts on “Mansion tax is an “annual service charge” on the South East

  1. william lorne

    I am totally perplexed by this entire article. Are Knight Frank trying to say that house prices not growing in a uniform manor across the country is a disadvantage to those living in areas of high growth. Their hole stand point of gosh isn’t it hard for the lord and gentry seems unbelievably inappropriate given the financial strain then entire country is in. Are they paying 17% of the stamp duty (I gasp as a small tear trickles down my cheek) yes of course they are because they are fortunate enough to be able to. I also love the fact they state these £2 million property owners have a modest income. I haven’t looked at the figures however logic dictates if they can afford a £2m in prime central London there probably not doing to badly for themselves.

    So in conclusion no I don’t think it’s unfair. Now is the time when we all have to band together and accept that times are hard and if we are going to deal with the deficit we are all going to have to pay our share in proportion to our assets and income.

    As an estate agent i read posts on this website every single day and never have once felt the need to comment. However, as somebody with a genuinely modest income, I found Knight Franks stand point ridicules and borderline offensive.