The revaluations required to implement Labour’s Mansion Tax would involve a complex and resource-intensive process that risks costing more than the tax it raises, according to Chris Husson-Martin (pictured), who worked on the last major council tax revaluation in 1991.
Husson-Martin, who is now Head of Sales at Hamptons’ Salisbury branch, says the Government has already ruled out using existing council tax bands, which are too old and inaccurate to be of any use, so a separate valuation framework would be required.
Incomplete evidence
He told The Telegraph that he believes the process is instead likely to begin with automated valuation models based on historic sale prices and comparable transactions. However, he argues this presents its own problems, as the sales evidence is incomplete. That’s because almost a third of homes in England have not sold since price records began in 1995, including many high-value properties, leaving significant gaps in the comparable data.
For those properties, values would need to be inferred from nearby or similar homes. Husson-Martin says this approach becomes less reliable outside dense urban markets and increases the risk of error for properties close to the £2m threshold, many of which would require manual valuations.
That would substantially increase costs, as internal inspections would require qualified surveyors, access arrangements and significant man-hours.
Multiple appeals
Chris Husson-Martin adds that properties clustered around the £2m threshold would also be particularly prone to appeal, adding yet more reassessment and administrative costs. That same threshold would also present a major issue in Prime Central London, where, in recent years, price falls have pushed many homes below the £2m mark.
Husson-Martin therefore believes that the staffing, inspections, appeals and ongoing administration costs will erode the Mansion Tax’s net revenues, raising the risk that it will cost more to implement than it delivers.
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