Brokers have dismissed the Liberal Democrats’ proposal for a 1 per cent mansion tax on properties worth over £2m as unworkable.
LibDem Business Secretary Vince Cable recently floated the mansion tax as a possible replacement for the 50p top rate of tax levied on incomes over £150,000.
Recent reports suggest that Chancellor George Osborne may be considering introducing the tax in next Wednesday’s Budget.
There are an estimated 74,000 properties worth over £2m in England and Wales.
Association of Mortgage Intermediaries director Robert Sinclair says the move would unfairly disadvantage people who live in the South-east. He says: “The mansion tax is aggressive in one region compared with other areas and that is never a good place to start.”
High-net-worth brokerage Enness Private Clients director Hugh Wade-Jones says: “We believe a mansion tax is likely to do more harm than good, given the significant cost that would be incurred in setting up such a scheme.”
In November, Chancellor George Osborne announced the stamp duty holiday for first-time buyers purchasing properties up to £250,000 will not be extended beyond March 24. Many in the mortgage industry are lobbying for it to be extended in next week’s Budget.
Some brokers have also called for the Government’s shared-equity scheme to be extended beyond newbuild properties.
London & Country associate director of communications David Hollingworth says: “It would be beneficial for the many borrowers who do not want a newbuild.”