©Michele Monticello Essay  all photos ©Michele Monticello  

The idea that Andy Burnham would consider lowering the Mansion Tax threshold to £1.5 million is, in my view, a deeply flawed policy that risks punishing the wrong people and damaging one of the country’s most important economic engines.

A wealth tax should be about targeting genuine concentrations of wealth, not ordinary homeowners who happen to live in areas where property prices have risen over many years. In London and parts of the South East, a £1.5 million home does not necessarily represent extraordinary wealth. For many families, it represents a lifetime of work, investment, and simply owning a property in a high value market.

The danger is that this becomes less of a tax on the wealthy and more of a tax on location. People who bought homes decades ago, pensioners who are asset rich but cash poor, and families who have built their lives in their communities could suddenly find themselves facing large annual bills simply because their property value has increased.

This is not just a housing issue it is an economic one. London is a global city and a major contributor to the UK economy. Policies that discourage people from moving, investing, improving properties, or starting businesses risk damaging the very growth that governments claim they want to encourage.

A Mansion Tax may sound politically attractive because it suggests targeting the wealthy, but the reality is far more complicated. The costs, administration, appeals, and unintended consequences could outweigh the revenue raised. If people become afraid to move because of future tax liabilities, the housing market becomes less fluid, affecting buyers, sellers, builders, tradespeople, and the wider economy.

If the goal is to tackle inequality, then policymakers should focus on genuine wealth and excessive accumulation, not simply reducing a threshold until more and more ordinary homeowners are dragged into the system.

In my opinion, this would be political self harm. It risks alienating a large section of society while weakening one of the country’s most productive regions. London should not be treated as a cash cow to solve wider political problems.

A government that wants growth should be encouraging ambition, investment, and mobility not creating fear around home ownership. If this policy goes ahead, it may not just be a tax decision; it could become a defining political mistake.

 

Article https://thenegotiator.co.uk/news/regulation-law-news/andy-burnham-will-see-more-pay-mansion-tax/

https://moneyweek.com/investments/property/burnham-mansion-tax-lower-threshold