The idea of a 1% annual tax on homes worth over £2 million has been revived in recent weeks, with two major political parties throwing weight behind the idea.
Dubbed Mansion Tax, the levy, which was first suggested by the Liberal Democrat party before the last election, is back on the political agenda after the leader of the Labour Party Ed Miliband and Shadow Chancellor Ed Balls voiced support for the proposal.
Mr Balls said that implementing a Mansion Tax could raise up to £2bn, but that it would have to be structured so low income pensioners were not penalised.
With around 70,000 homes thought to be currently worth over the £2 million, Which? identifies which areas would be affected by any potential Mansion Tax.
£2 million property hotspots in London
The majority of £2 million properties in England and Wales can be found in London and the South East.
Recent research by Lloyds TSB found that property in the Royal Borough of Kensington and Chelsea is worth the most on average. Five of its most expensive streets include:
- Egerton Crescent, with property there worth £8,136,000 on average;
- Campden Crescent, worth £4,863,000;
- Blenheim Crescent, worth £4,728,000;
- Lansdowne Roa, worth £4,693,000;
- Drayton Gardens, worth £4,428,000;
- and Eaton Square – £4,391,000
Merton, in South West London, also appeared high on the list with houses on Parkside, the nation’s second most valuable address, worth £5,161,000 on average. And Home Park Road, also in Merton, is the sixth most expensive street, with an average property price of £4,685,000.
£2 million property hotspots outside of London
Away from the capital, the most expensive streets are Woodlands Road West in Virginia Water, Surrey (£3,201,000), Leys Road in Leatherhead, Surrey (£3,018,000), The Ridgeway in Radlett, Hertfordshire (£2,368,000) and Phillippines Shaw in Sevenoaks, Kent (£2,250,000).
Outside of the South East, the only other street where people are likely to face the proposed tax is Park Lane in Trafford, where property is worth £2,109,000 on average.
Introduction of Mansion Tax ‘unlikely’
The introduction of a Mansion Tax under the current coalition government is unlikely, as Chancellor of the Exchequer George Osborne has spoken out against such a tax.
Leader of the Liberal Democrat Party, Nick Clegg has also suggested anyone who owns an expensive property but is unable to afford the tax could potentially defer it until after they died, with the charge levied on their estate instead.