New tax attack on £2m-plus homes this week

An accountancy firm has raised the prospect of another tax hitting £2m-plus properties, possibly to be announced in the Budget.

George Bull, senior tax partner at accountancy firm Baker Tilly, says chancellor George Osborne - who on Wednesday delivers his final Budget ahead of the May 7 general election - could announce a withdrawal of Private Residence Relief on residential property which sells for more than £2m.

Currently, when a UK resident taxpayer disposes of their UK home, any resultant gain is generally tax free. By introducing such a measure, those selling homes worth more than £2m would be subject to UK Capital Gains Tax explains Bull.

Reports from industry players as varied as eMoov and LonRes have suggested that the possibility of a mansion tax under a future Labour government has already stifled sales of properties at or near the £2m mark, where such a tax would probably begin.

And in December the only losers' from the stamp duty reform announced by George Osborne in his autumn statement were those buying high-end property.

Savills calculates that the latest stamp duty reforms have increased the tax burden on high value properties by £1.1 billion, and the wealthiest 1.6 per cent of households now pay almost half of all stamp duty in the country. It says that in addition, the introduction of, and recently increased rate of, annual tax on so-called enveloped' dwellings has added at least another £100m a year to high value property tax.