Labour\u2019s vow to tax \u00a32 million-plus homes threatens to clobber London\u2019s middle-class families hard. Jonathan Prynn joins the Farrow & Ball revolt<\/p>\n
We are the \u201caccidental multi-millionaires\u201d who never dreamed that our neat terraced homes would be the target of a Treasury tax grab. But if Labour\u2019s \u201ctwo Eds\u201d become neighbours on Downing Street next May thousands of London families who thought they had more in common with the \u201csqueezed middle\u201d than the Candy and Candy classes will find themselves on the mansion tax hook alongside the One Hyde Park oligarchs.<\/p>\n
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 \u00a32\u2009million with an annual charge of at least \u00a33,000.<\/p>\n
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.<\/p>\n
\u201cWe paid \u00a3250,000 for our house,\u201d said one Labour-supporting marketing executive from Putney, whose handsome family home is now worth around \u00a32.5\u2009million. \u201cI grew up on a council estate, I didn\u2019t inherit any of the money, I earned all of it. It seems so unfair.\u201d<\/p>\n
In my case, family houses in our street west of Shepherd\u2019s Bush in what was middle-class \u201cfrontier\u201d territory when we moved there in 1997 now change hands for bang on \u00a32\u2009million.<\/p>\n
After all the \u201cwe\u2019re in this together\u201d taxation and benefit squeezes of the austerity years \u2014 higher national insurance, axed child benefit, limits on pension fund contributions \u2014 this one feels uniquely personal.<\/p>\n
The threat has already stalled house prices above the \u00a32\u2009million 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 \u201cfiscal blight\u201d hangs over local property markets.<\/p>\n
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.<\/p>\n
It will hit comfortably-off but not wealthy families who stretched themselves to buy homes in areas that they have helped to gentrify.<\/p>\n
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