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Local estate agent Aston Mead is throwing its weight behind calls to prevent a ‘Mansion Tax’ coming into force in the UK.

Both Labour and the Liberal Democrats have proposed imposing levies on homes more than £2 million – many of which are in Surrey & Berkshire. But new research published by Savills last week suggests any such tax could backfire, wiping almost £1billion off government revenues.

Aston Mead Director Adam Hesse said: “What the proponents of this new tax have failed to recognise is that a levy like this would actually deter wealthy investors from buying in the area. Even those who do buy are likely to be willing to pay less for properties – which would have a knock-on effect for stamp duty and inheritance tax revenues. So as this new report indicates, instead of raising more money for Government coffers, a Mansion Tax would actually raise less.”

“Besides being an extremely complicated scheme to administer, there is also the inherent unfairness behind the proposal. People would be penalised – some of them on very small incomes or pensions – simply for living in properties for several decades which have grown in value. The fact that their house has jumped into a higher price bracket just because they have lived there for so long is hardly their fault.”

Adam Hesse suggested that a much more important priority for the Government should be a reform of the current stamp duty system.

He explained: “A ceiling of 7% for properties over £2 million means that someone paying 2 million and fifty thousand pounds for a house is paying the same stamp duty percentage as someone paying £10 million – which hardly seems fair. If the Government is looking for ways to tax the rich, it could introduce additional stamp duty thresholds to even out this imbalance.

“But all the while the threat of a Mansion Tax remains, a disincentive to buy lingers at the top end of the property market – the ricochet effect of which affects us all.”

 
 

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