I am disturbed that Nick Clegg and other politicians have raised the spectre of mansion tax once more. Rather than helping to stabilise the economy, introducing a permanent mansion tax on properties over £2 million would put Londoners at a disadvantage in both the short and long term. It is very misguided to think that placing further tax burdens on the wealthy would be a good way to stimulate growth.
The international appeal of prime London property is one of the only glimmers of hope in our economy and we shouldn’t sabotage this advantage.
The longer uncertainty prevails in the euro zone and in the global financial markets, the more people are looking to prime central London as a good defensive hedge to preserve their wealth. But the uncertainty of unwritten legislation is having an adverse affect on investment.
Prime London property is currently viewed as a stable and reliable asset class which outperforms almost every other. Introducing a mansion tax will undoubtedly have a negative effect on how ultra-high net worth overseas buyers perceive London’s property market – making it a less attractive place for them to invest.
Instead of taxing successful people, we should focus on continuing to build London’s strong reputation as a centre of finance, international commerce and world-class education. Success breeds success.