Mansion Tax on London Homes Above £1.5m Expected to Hit 10.9% of Owners

In London, a staggering 10.9% of homes are worth over £1.9m, and 4% of homes in the South East are worth over £1.5m, according to data from Rightmove. The proposed "mansion tax" on homes above £1.5m could introduce capital gains tax for primary residences in the UK, potentially deterring London movers and hitting higher-rate taxpayers. With the levy expected to generate £40bn, Chancellor Rachel Reeves is reportedly considering its implementation in the Autumn Budget.

Key Takeaways:

• The proposed "mansion tax" would introduce capital gains tax for primary residences in the UK, with higher-rate taxpayers paying 24% and basic rate taxpayers paying 18% of any gain made from the increase in property value.
• Around 120,000 homeowners who are higher-rate taxpayers with capital gains tax bills of £199,973 would be affected by the levy.
• The tax would predominantly be a tax on the most expensive areas of London and the South East, with Colleen Babock from Rightmove stating it could deter some moves at the upper end.
• Trevor Abrahmsohn, managing director of Glentree International, believes the proposed tax changes will discourage selling, saying it would not produce the needed monies immediately and would be another imposition driven by politics of envy.

Statistics:

• 10.9% of houses in London are worth over £1.9m (Source: Rightmove)
• 1.6% of houses outside of London are worth over £1.9m (Source: Rightmove)
• 4% of houses in the South East are worth over £1.5m (Source: Rightmove)
• £1.5m is the proposed threshold for the mansion tax (Based on article)
• £40bn is the potential revenue generated by the levy (Source: Article)

Sources:

• "Rachel Reeves considers mansion tax on homes above £1.5m" by cityam.com
• "Reeves mulls scrapping stamp duty for new national property tax" by cityam.com
• "Homeowners could pay new property tax instead of stamp duty" by The Times