Labour’s vow to tax £2 million-plus homes threatens to clobber London’s middle-class families hard. Jonathan Prynn joins the Farrow & Ball revolt
We are the “accidental multi-millionaires” who never dreamed that our neat terraced homes would be the target of a Treasury tax grab. But if Labour’s “two Eds” become neighbours on Downing Street next May thousands of London families who thought they had more in common with the “squeezed middle” than the Candy and Candy classes will find themselves on the mansion tax hook alongside the One Hyde Park oligarchs.
Details of the threatened levy are still thin on the ground even after shadow chancellor Ed Balls fleshed some of them out in the Evening Standard this month. But we do know that he will hit homes worth more than £2 million with an annual charge of at least £3,000.
The possibility of an extra impost has appalled even strongly Labour-leaning homeowners who borrowed, scrimped and saved to buy the homes where they raised their families.
“We paid £250,000 for our house,” said one Labour-supporting marketing executive from Putney, whose handsome family home is now worth around £2.5 million. “I grew up on a council estate, I didn’t inherit any of the money, I earned all of it. It seems so unfair.”
In my case, family houses in our street west of Shepherd’s Bush in what was middle-class “frontier” territory when we moved there in 1997 now change hands for bang on £2 million.
After all the “we’re in this together” taxation and benefit squeezes of the austerity years — higher national insurance, axed child benefit, limits on pension fund contributions — this one feels uniquely personal.
The threat has already stalled house prices above the £2 million mark. Homes in desirable areas such as Clapham and Islington that were once snapped up in days following a frenzy of sealed bids now wither on the property vine for months as “fiscal blight” hangs over local property markets.
And that is just the beginning. Agents talk darkly of the market falling by as much as 20 per cent in value if the tax comes into effect.
It will hit comfortably-off but not wealthy families who stretched themselves to buy homes in areas that they have helped to gentrify.
Source: standard.co.uk