The proposed mansion tax from the Labour Party is one of the biggest issues in the property market when it comes to next year's general election. It is expected to be a factor that influences many voters, but could it be that the party's plans are actually well wide of the mark and end up missing their intentions?
Knight Frank has looked into the mansion tax potential, and it discovered that far from targetting the palatial abodes and mega rich, those who would be hit hardest would be people who own flats and terraced properties in London.
The boroughs of Kensington and Chelsea and Westminster are home to 46 per cent of all mansion-tax eligible homes in the country (those costing more than £2 million), and the Knight Frank investigation showed that far from all being the sort of large residences that Labour wanted to target, it will mostly be smaller houses and apartments.
Throughout England and Wales as a whole, 26 per cent of all homes that would be obliged to pay mansion tax are flats in those two London boroughs alone, while 38 per cent of all £2 million-plus homes in the capital as a whole are flats. By way of contrast, only 14 per cent are large detached properties.
Even terraced houses come above large detached homes, accounting for 36 per cent of all homes costing more than £2 million.
"The figures demonstrate the mismatch between perception, in particular the term mansion, and the reality of the London property market, where three quarters of £2 million-plus properties are either flats or terraced houses," said Tom Bill, head of residential London research at Knight Frank.
He also went on to add that putting this sort of tax on UK property would only be detrimental to the London market, an area which is already unfairly treated with regards to stamp duty, contributing 42 per cent of all revenue alone.