Potential proposals for a mansion tax would unfairly impact ordinary Londoners and risk further stalling the capital’s already slowing housing market, according to Dominic Agace, CEO of Winkworth.
Chancellor Rachel Reeves is reportedly considering introducing a mansion tax in next month’s Budget to help plug the multi-billion-pound gap in public finances.
However, Agace argues that introducing another wealth tax would place an additional burden on ordinary Londoners who are already grappling with high living costs and property taxes.
He said: “The government is driving away the wealth generators in our country. Speculation of this kind has already affected the market and it’s hard not to see how such a tax won’t cause wealth destruction. It is particularly unfair for those in London where it’s not all uber wealthy people who own these houses.
“Many families in these houses have significant mortgages and are already tackling mortgages that have more then doubled as interest rates have increased. They have already paid significant stamp duty too.”
If the government were to press ahead with changes to Capital Gains Tax (CGT) on main residences, it would have significant implications for the UK housing market.
Recent research by Boon Brokers found that 97% of UK homeowners disagree that applying CGT to primary homes would be a fair way to balance public spending.
According to the findings, 73% of respondents said the proposed changes would be unfair, arguing that homeowners have already paid enough through existing taxes and rising living costs.
Gerard Boon, founder of Boon Brokers, warned: “Introducing Capital Gains Tax on main residences could have serious consequences for the housing market. When fewer homeowners are willing to sell, supply will naturally constrict, driving up competition and prices. This imbalance between supply and demand doesn’t just impact affordability, it would risk stagnating the market and placing greater pressure across all levels of the housing market.”
For estate agents, brokers, and developers, the prospect of dampened sales volumes and weakened seller sentiment represents a serious commercial concern.
Read the orginal article: https://propertyindustryeye.com/a-mansion-tax-would-be-unfair-for-ordinary-londoners-and-slow-the-market/
