Wimbledon MP slams “misguided” ‘mansion tax’

Wimbledon constituency is uniquely exposed to the Chancellor’s proposed mansion tax, with many homes high in value due to location and decades of price inflation, not because residents are wealthy. A flat mansion tax risks hitting mid-income households disproportionately, ignoring the difference between liquid wealth and paper wealth, and worsening blockages in an already struggling London housing market.

The Liberal Democrat MP for Wimbledon has the Chancellor’s “mansion tax,”* warning that the policy will unfairly penalise thousands of local residents while failing to deliver meaningful reform of the wider property tax system.  

Wimbledon’s detached homes sold for an average of £2.95 million over the past year, placing many homes above potential mansion tax thresholds.**

Yet the MP warned that these price tags do not reflect local incomes. Many properties have risen steeply in value due to location and long-term inflation, not because residents are high-earning. Wimbledon also has a large group of older, long-standing homeowners who are “asset-rich but cash-poor” and would struggle to pay thousands of pounds a year in new taxes. 

A flat annual levy would disproportionately impact mid-income households who bought decades ago.

Mr Kohler cautioned that the Government’s £400 million estimate*** is highly uncertain. The measure could raise far less than expected and even trigger short-term losses in other property taxes, including Stamp Duty Tax and Capital Gains Tax. 

The Liberal Democrats are instead calling for a fairer alternative, including a windfall tax on the big banks, raising up to £30 billion by 2030, and an increase in the Digital Services Tax from 2% to 10%, raising an extra £4 billion a year from the tech giants.

Commenting, Paul Kohler MP said:

“This tax would hit people who bought modest homes 30 or 40 years ago, people who have contributed to our community their whole lives and are now being told they are ‘mansion owners’ simply because the market moved around them.”

“Any property-based tax must distinguish between paper wealth and real, liquid wealth, Reeves's plan does not. This looks like another Labour tax grab dressed up as reform. It is the wrong solution to the wrong problem and Wimbledon would be one of the areas hardest hit.”

“London’s housing market is already paralysed. The last thing we need is more bureaucracy, more disputes over valuations and another barrier to people moving home.”

“If Labour is serious about funding public services, they should focus on the corporations and global tech giants who are not paying their fair share.”

Further reading:

*The Chancellor is considering an annual 1% levy on the value of a property above £2 million, leaving the owner of a £3 million home facing a new bill of £10,000 every year.

**These figures are according to the latest Land Registry-based figures from Kinleigh Folkard & Hayward.

*** The Treasury Estimates the Mansion Tax will raise £400m by 2031 from taxing properties worth £2million and above. It relies on assumptions that owners will adjust property prices to avoid higher bands, shrinking the number of properties in scope. 

The budget can be found here

The OBR report can be found here