Cluttons hits out at Lib Dem "mansion tax"

Property consultant and estate agent Cluttons has criticised the levy on £1m plus homes proposed by Liberal Democrat MP Vince Cable.

James Hyman, partner for residential sales at Cluttons, said: “The impact of the Liberal Democrats’ proposed ‘mansion tax’ on the wider economy would be significant alongside the new 50% top tax band on high income earners which is being introduced in April.

“The disposable income of the UK’s top earners would be severely slashed as a result of these combined policies, which would undoubtedly impact all sectors of the economy as well as the housing market.

“The majority of people buying properties at over the £1m level would normally look to reinvest upwards of 1% of the value of their home in improvements and maintenance every year. This new stealth tax, combined with increased Income Tax, could prevent people from making their next property progression as their affordability is greatly reduced, resulting in considerable stagnation at the upper end of the market and ultimately impacting values.

“It is also unclear how the Liberal Democrats propose to value properties for this tax, considering we are likely to see volatile fluctuations in house prices over the next five years.”