The proposed mansion tax could prompt owners of expensive properties to seek out novel loopholes according to one Lincolnshire property agent.
In the late 17th century, the so-called windows tax was brought in by King William III. People with 10 or more windows in their property had to pay a higher charge. The wealthy saw it as a ‘tax on the light and air’, hence the term ‘daylight robbery’ and many bricked up windows to avoid it.
Property owners that would be affected by Labour’s proposed Mansion Tax are looking at ways to get around this modern levy, suggests Anna Cole of agents Strutt and Parker of Stamford. The £2m starting point could spur some to turn homes into multiple properties. She said sub-dividing a property or splitting interests would be a radical approach and less likely to be worthwhile if the property is worth £2m to £3m.
But she added: “It might work for those with higher worth properties, since the extra cost of council tax is unlikely to be more than the proposed new levy.”
She added home owners just under the £2m threshold could be deterred renovating for fear of increasing value.