The Mansion Tax - Where would be impacted
The Mansion Tax is a hot topic as the run up to the General Election on May 7th continues. Both Labour and the Lib Dems advocate the introduction of a Mansion Tax within their respective manifestos. The fundamental principle of the Mansion Tax is an annual taxation of properties with a value in excess of a certain threshold – both Labour and the Lib Dems discuss a threshold of £2m.
Whether the Mansion Tax affects you, clearly depends on the value of the property that you live in. However, the chances a person living in a property worth in excess of £2m varies hugely on where in the country they live. In total, across England & Wales, we estimate that between 90,000 and 100,000 properties would be subject to a Mansion Tax. Unsurprisingly, the vast majority of these properties are in and around Greater London, with over 95% of properties within a 50 mile radius of the centre of London. The map below shows the breakdown of the estimated number of properties that would be affected by a Mansion Tax, broken down by Postcode District.
Only a few areas outside of London and it's surrounding areas have more than 50 properties where a Mansion Tax may apply. These areas are:
- South & West of Cambridge
- South Manchester/North Cheshire
The map below is a zoomed in view of Greater London and it’s surrounding areas
The postcode districts with the highest number of properties likely to attract any Mansion Tax cover Kensington and Chelsea (postcode districts SW3, SW7 and W8). In total, for the 3 postcode districts combined, we estimate that in excess of 15,000 properties would be affected, which equates to approximately 35% of the housing stock in the area.
Clearly, which political party or parties form the next UK Government will determine whether or not a Mansion Tax is introduced. However, if one is introduced, the timing of when the £2m benchmark is set would also drive how many properties would be affected. If, for example, the introduction of the Tax was delayed and in the intervening period, property prices rose on average by 10% across the country, then we estimate that the number of properties likely to attract the Mansion Tax would increase by circa 25% (to between 110,000 and 125,000 properties) with again, London and it’s surrounding areas taking the biggest hit.
If you'd like more detailed information on this article or specific information about a certain area of the country then please get in touch using our contact form.
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