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£1bn mansion tax would slam London & the South East

3rd Dec 2009

  • 80% of tax burden would fall on London with further 11% on South East
  • Four London boroughs would pay 60% of UK total
  • 32,500 households would be hit
  • Average tax bill per household would be £32,700

The Liberal Democrats' proposed mansion tax on £2m properties would raise £1.05bn and hit 32,500 homeowners, according to new research from property website The website analysed all the properties in the country valued over the £2m threshold and calculated how much tax would be raised.

On average each homeowner would pay £32,700 per year, with those just above the threshold paying £20,000 while those with more expensive homes paying much more.

The tax would be a hugely skewed to homeowners in London and the South East. 91% of the tax take would be paid by homeowners in these two regions, a massive £955m. All the other regions put together would pay the remaining £95m between them.

Astonishingly, 10% of the total national tax take would come from just one district in London - Holland Park. The top ten areas, all of which are in just four London boroughs, would account for over half (54%) of the UK mansion tax yield, a total of £567m. Kensington & Chelsea, Westminster, Hammersmith & Fulham, and Camden would together pay 61% of the UK total, with Kensington & Chelsea alone paying almost a quarter (24% or £252m). Overall, Londoners would pay 80% of the UK total.

Nicholas Leeming, commercial director of said: "The £1.05bn that would be raised from this tax is some way short of the £1.7bn mooted. The Libdems have overestimated how many properties are still worth that much money. Nevertheless, it is a large sum of money to be paid by a small number of people.

He continues, "Property in London and the South East is already the most highly taxed in the country. Stamp duty thresholds and inheritance tax already discriminate against those who live in these two regions. The Libdems' so-called mansion tax would slap another huge bill on the same areas at no political cost to themselves given the low levels of support they have in these areas. To expect residents of just four local authorities to stump up £640m in tax while most of the country escapes scot free is an outrage.

"The mansion tax would hugely distort the housing market around the £2m threshold and cause sharp price falls in a broad band up to £2.5m. A few extra pounds on the purchase price taking a property over £2m would saddle the buyer with a tax bill of £100,000 over the course of a Parliament. Even for comparatively wealthy families, that's a huge sum to find."

Top ten payers by area

Area Tax Take % of national tax take Average property value (Dec 09)*
Notting Hill (W11) £103,822,923 9.9% £1,049,394
Kensington (W8) £84,750,654 8.1% £1,535,105
Chelsea (SW3) £80,919,569 7.7% £1,231,691
Belgravia & Pimlico(SW1) £79,894,177 7.6% £1,316,300
Hampstead (NW3) £49,031,512 4.7% £828,245
South Kensington (SW7) £46,687,817 4.5% £1,232,470
St Johns Wood (NW8) £41,141,278 3.9% £801,388
West Brompton (SW10) £34,785,326 3.3% £976,756
Mayfair (W1) £25,973,659 2.5% £783,550
Camden (NW1) £22,026,221 2.1% £570,277
TOTAL £569,033,136 54.3%

* Source:

Top 5 payers by local authority

Local Authorities Tax Take % of UK tax take
Kensington and Chelsea £255,191,025 24.33%
Westminster £178,889,062 17.06%
Hammersmith and Fulham £132,019,132 12.59%
Camden £71,621,824 6.83%
Wandsworth £29,421,326 2.80%

* Source:

Regional breakdown

Region % of Tax Take Average property value (Dec 09)*
London 79.5% £384,993
South East 11.5% £261,904
East of England 2.1% £220,606
South West 1.9% £212,388
Scotland 1.7% £157,336
Northern Ireland 1.4% £220,360
North West 0.9% £153,315
West Midlands 0.5% £169,005
Yorkshire and The Humber 0.2% £141,381
East Midlands 0.2% £156,954
North East 0.1% £157,285
Wales 0.1% £148,257

* Source:

- Ends -

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