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Will the mansion tax hit house prices?

The first thing to say is that mansion tax does not yet exist as a formal requirement. It is only a proposal brought forward by politicians such as Nick Clegg who believe the wealthy, who own properties of a certain size which are worth in excess of £2 million.

It is not yet clear what percent the affected taxpayers would have to pay.

As far as the impact on house prices is concerned, agents remain divided. Some have argued it would demotivte people from buying seeing a reduction in value, while others have argued six in ten overseas millionaires still rank London property as their favourite kind of asset class.

It is more likely the new Stamp Duty could have an impact on housing market trends with 5 per cent applicable on houses that sell in excess of £1 million and 7 per cent applicable to those in excess of £2 million.