Westminster Council recently announced plans for a voluntary mansion tax on buildings worth more than £10m. DBPR asked London property experts for their reaction….
Giles Cook, Best Gapp
“The idea of a blanket mansion tax fills me with dread. We saw the fallout when it was first muted by Labour in their 2013 manifesto and sensibly the idea was subsequently voted against by the Tories and Lib Dems.
The concept though of higher annual Council Tax bills for those living in super-prime homes (£10m+) seems fair and reasonable and would most likely be well received by all those affected. Any additional funds to local government’s coffers has to be positive and improvements to the area’s amenities and facilities at very little extra cost to those that can afford it makes perfect sense. There won’t be any impact on property values in Westminster should a Council Tax increase be approved, however it does beg the question “what further lengths will this government go to in their drive to consistently play with property taxation by targeting those who pay the most and keep a plethora of small and medium sized companies in business?”
David Lee, Pastor Real Estate
“I suspect many of our UHNW clients will welcome the proposal. Many such owners will no doubt see this as an opportunity to support their local community, generating much needed funds. The current council tax system is clearly in need of reform and this voluntary charge may go some way to addressing the disparity between PCL property values and historic council tax banding. Given the costs involved in comparison to the current SDLT rates, this proposal will have a very limited impact on the market; more so it will likely spark a debate on the subject, something that is much needed.”
Mark Parkinson, Middleton Advisors
“It will be fascinating to see the take up if this mansion tax scheme is introduced. On the one hand it could be a great opportunity for those in the highest priced houses in London to quell any labour/ liberal calls for a mansion tax. On the other hand if you were the owner of one these houses would you see it as ‘the thin end of the wedge’ and a pre-cursor to a country wide, more extensive and punitive uplift in prime property taxes?- maybe this will be seen as a ‘pilot scheme’ for a wider uplift.
Common sense says (and I suspect the majority of owners of such houses would agree) that there should be a more complex council tax system allowing for many more bands above £1m which could generate more revenue (country-wide not just in London) and would be regarded as a fairer system. In a perfect world this would go hand in hand with a moderation of SDLT above £2m….”
Alex Newall, Barnes Private Office
“Our clients are generally philanthropic in nature, but even more so if they have an understanding of where their money goes and that it returns a meaningful impact back into an area / topic which impacts them and their family. Their neighbourhood counts as one of these areas. For example taking gangs off the streets, and giving them a better path in life, would make residents feel safer at night. The question therefore is – who would not support it? Many of our clients would be in.”
Andrew Langton, Aylesford International
“One can only imagine Westminster council may have assumed if Ryan Air can charge you for using the lavatory they can apply a similar type of tax for living in your home. The question is how long will this be a voluntary mansion tax until it becomes compulsory?”