A report by Knight Frank reveals that if the ‘mansion tax’ were introduced, some homeowners could end up paying more in tax than the purchase price of a property over its lifetime.
The report also reveals that to raise the targeted revenue, the value threshold for the tax would need to be reduced from £2m to £1.25m (to raise £2bn). This would double the number of properties affected from 55,000 to 140,000.
The tax would be levied overwhelmingly on London and the South East of England, with 86.4 per cent of all £2m+ properties located in those two regions.
The number of properties affected will increase from 55,000 homes – currently worth £2m – to 775,500 over the next 25 years.