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We all want what we don’t have and always wish for more. A bigger home, a faster car… It is easy to envy thy neighbour when they seem to have more than you do.

With the proposal of mansion tax, John Elliott, Managing Director of Millwood Designer Homes, says that you should be careful what you wish for.

“Mansion tax is an annual tax to be paid by the owners of houses worth more than £2m. Originally an idea floated by the Liberal Democrats in 2010, it was adopted as a pre-election promise by the Labour leader, Ed Miliband, who has insisted its plan would raise more than £1bn annually to boost spending in key areas, such as the NHS. Surely the NHS needs reform, not more money provided by taxation on property. All that is doing is feeding a system that fundamentally needs change or it will just keep on repeating the same mistakes.

“Details of the threatened levy are still thin on the ground, but we do know that homes worth more than £2m will be hit with an annual charge of up to £30,000. Apparently, there will be protection for cash-poor but equity-rich owners – likely to be the option of paying the charge from their estate when they die (advanced death tax!)

“In 2013, David Cameron ruled out imposing a mansion tax. He told the BBC that a “wealth tax is not sensible for a country that wants to attract wealth creation, wants to reward saving and people who work hard and do the right thing”.

“I couldn’t agree more. Mansion tax will hit comfortably-off but not wealthy families who have worked hard, traded up the property ladder and stretched themselves to buy that dream home.

“Talk of the levy has meant buyers are becoming more reluctant to purchase properties that could potentially be hit by the charge. As a result, prices and transactions above the £2m cut-off are significantly reduced. Any property that could previously have sold for just over £2m will immediately be worth less than £2m. This in turn has a knock-on effect on homes below that bracket, filtering down the entire housing market. Agents predict the market will fall by as much as 20 per cent in value if the tax comes into effect.

So if you thought that you were safe from mansion tax, you may well find that you are still affected by ending up in negative equity, as the levy threshold reduces down the value range.

“I think that new forms of taxation should focus on the ability to pay, not be based on the property value.

This is evident because families may have to sell their family home as they have been valued at over £2m and they could not afford the mansion tax, only to see their home of over 50 years going at auction for less than £2m and, as a result, dropping out of the tax zone, causing yet more difficulties and complications. How is that fair? More importantly, the value of a property should be determined by the market and not by the so-called ‘expert’ valuers, who would presumably provide the data for calculating a new tax, so in many cases, homes might be falsely valued over £2m. Worryingly, the threshold for the tax could also drop below £2m if it does not raise enough money, affecting even more people. You may be an Ed Miliband voter but if you have a house worth £1m you’ll probably be next on his hit list. In addition, for those family homes passing down the generations, the tax would complicate and add significantly to the amount of inheritance tax paid.

“More importantly, owing to the significance of location, homes subject to a mansion tax would be of very different shapes and sizes. It will not just affect the very largest homes, but also family homes and in some cases even small flats – not exactly what you imagine when you think of the word mansion, which for most is a sprawling country home in acres of grounds with the addition of a swimming pool, tennis courts or even a stable.

“Estate agent Knight Frank suggests that 36% of £2m-plus homes are detached, 31% are terraced, 22% are flats and 11% are semi-detached. The vast majority of these properties – well over 80% – would be in London and the South East of England. The number of homes that will be affected varies depending on who you talk to, ranging from 58,500 to 110,000.

“Above all this, it is going to take a huge resource in order to implement mansion tax (if it can actually be implemented at all!) The Government would have to spend time and money valuing every house in the country, and they will find it difficult collecting and monitoring the tax so it will be easy to avoid paying it. Rateable values have not been reassessed since 1991, therefore, the current tax bands for council tax are well and truly out of date. Given that the tax bands, as with all taxation, require the more valuable homes to pay the greater amount of tax, then a re-valuation of the current system would surely be easier and fairer in all shapes and forms. This re-valuation must come sooner or later anyway, so why not now, thus raising more revenue across the board and not just taxing the south east via a mansion tax.

“All in all, mansion tax will have (and is already having) a damaging effect. It will actually drive down stamp duty revenue and affect everyone, including pensioners who are often on lower incomes. I am also concerned that taxing high-value homes will lead to a more general tax on wealth. Plus, there is a risk that tax will lead to the most wealthy moving abroad, which would lead to less investment in the UK.

“Rich people are already heavily taxed. In fact, Britain’s top 1% of wage earners pay almost a third of all income tax, rising from 20% to 30% over the last decade, and tax evasion is taken very seriously. So if a rich man chooses to invest his money in a family home that will pass through the generations, why should he be charged over the man who chooses to spend a fortune on a yacht? Both pay income tax, both will pay inheritance tax and both will pay tax on the goods and services their choice requires. There are plenty of people out there with assets, why are they penalising those with property?

“There are people who have sunk their savings into a home in the higher price brackets who have decent incomes but after tax could not afford the super high levels of mansion tax being proposed. They would have to sell along with hundreds of others thus depressing the markets down the chain. To suggest it could be deferred until death is just to increase the already grossly unfair 40% inheritance tax… and put nothing immediately into the NHS. It is just taxation envy!