"Prime central London remains one of the world’s most desirable and resilient property markets. And the reality is that those capable of purchasing at this level are unlikely to be phased by the introduction of a mansion tax"
- Islay Robinson - Enness Global
New analysis suggests many prime central London homeowners would have to make large reductions to the size of their properties to escape the newly introduced mansion tax on homes valued at £2 million or more. The research, carried out by Enness Global, indicates that some properties would need to shrink by almost half to fall below the threshold.
The new annual levy, announced by the Chancellor, applies to the portion of a home’s value above £2 million. In response, Enness Global examined all properties currently listed for sale at or above this level across prime central London. The review considered the average asking price, total square footage and the resulting price per square foot, then calculated the maximum property size that would avoid the tax.
The findings show that the average home listed above £2 million in the area is priced at £3.5 million and measures 1,768 square feet. With an average price of £1,995 per square foot, a property would need to be no larger than 1,002 square feet to sit below the £2 million point. As a result, the typical mansion would need to reduce in size by 43% to meet the threshold.
Several areas show even steeper theoretical adjustments.
• Camden homeowners would face the largest shift, requiring a 48.8% reduction.
• The City of London follows at 44.9%, with Westminster at 44%.
• In Kensington and Chelsea, homes would need to shrink by 42.7%.
• Hammersmith and Fulham sees the smallest cut among the boroughs analysed, though properties there would still need to lose 33.6% of their size.
“Of course, we are unlikely to see prime central London’s property landscape carved up like a Christmas turkey simply so homeowners can avoid a mansion tax,” said Islay Robinson, CEO of Enness Global. “However, what these figures highlight is the scale of adjustment a high net worth buyer would theoretically need to make to their lifestyle in order to escape this latest tax grab."
“Prime central London remains one of the world’s most desirable and resilient property markets,” said Robinson. “And the reality is that those capable of purchasing at this level are unlikely to be phased by the introduction of a mansion tax."
“What it does underline is the growing need for strategic planning around property ownership at the top end of the market,” commented Robinson. “Particularly for internationally mobile clients and long term wealth holders.”
