Mansion tax ‘will create ghost villages of wealthy foreigners’

LABOUR’S mansion tax will turn central London neighbourhoods into “ghost villages” as families are squeezed out of areas left affordable only to ultrawealthy foreign buyers, campaigners claim.

Residents of St John’s Wood have joined forces to oppose Ed Miliband’s proposed annual tax on homes worth more than £2 million. Labour claims it will generate £1.2 billion a year to help fund the NHS, but critics argue it would unfairly hit cash-poor homeowners.

Around 50 residents attended a meeting at St Mark’s church in Hamilton Terrace, where the average property price is £2.3 million. It was organised by anti-mansion tax campaign SHOUT.

Philip Morrell, 71, an entrepreneur who lives nearby with his wife and two teenage children, said the idea of a mansion tax was “anti-aspiration”.

He added: “I grew up in Barnardo’s homes and when I was 15 I lived in this area in a bedsit and said one day I’m going to own a house here. I built a company and sold it and fulfilled my dream. Now we are handcuffed... It’s a politics of envy.”

David Roberts, who is semi-retired and lives in Primrose Hill with his wife and four children, said: “Long-standing residents will be forced to sell to the international super-rich, hollowing out London’s village neighbourhoods. I don’t want to be forced out of the house I have lived in for 30 years by this vindictive tax.”

Retired Hampstead resident Harald Lipman, who served as senior medical adviser to the Foreign Office for more than 20 years, said he founded SHOUT on “humanitarian grounds”.

He said: “There are between 30,000 and 40,000 people in the UK who, if such a tax were introduced, would find themselves in a situation where it was impossible to pay the money.”

Full details of Labour’s proposal have not been released, but Ed Balls has confirmed that homes worth £2-3 million will pay £3,000 a year. The rates are expected to rise to as much as £125,000 a year for properties worth more than £20 million, according to analysis by agents Savills.

‘I don’t want to be forced out of my house by this vindictive tax’

David Roberts For those earning below £42,000 a year, the tax would be deferred until they sold up or died.

Mr Balls has said that overseas owners with second homes could be forced to pay a “larger contribution”.

Tens of thousands of London homeowners will also have to pay to have their homes valued at a cost of up to £4,800 per property, according to Savills. Taxpayers could be left footing a bill of as much as £65 million for the cost of disputes over valuation.

Lucian Cook, director of residential research at Savills, said: “A mansion tax would be particularly costly and complicated to administer, reducing its efficiency as a revenue raiser.”