A wealth tax would further affect the already beleaguered Prime London market, Camilla Dell, managing partner at property consultancy service Black Brick, has warned.
Downing Street has left the door open to higher taxes on the wealthy, in a bid to close the £20-£30 billion budget deficit in the upcoming Autumn Budget.
Lord Kinnock has recently publicly proposed a 2% annual tax on assets above £10 million which is suggested could raise £11bn.
However Dell said: “Wealth taxes have had mixed success internationally. Practical challenges have led many countries to abandon or reform them.
“France, Germany, and Sweden all abolished their wealth taxes and only Norway still has one in place and Spain (temporarily).
“However likely or unlikely a wealth tax may be in the UK, not closing the rumours down leads to unnecessary uncertainty in prime real estate markets like London.
“With the London property market already fragile, this is the latest in a series of blows that may cause some buyers to pause their decision on whether to buy now or wait until the Autum statement.
“Uncertainty around tax is the very last thing the market needs right now. We can only hope that the government sees sense and takes a closer look at how mobile wealth is, and how damaging abolishing UK Res Non-Dom regime has been for the UK with 16,500 wealthy individuals having left so far.
“A wealth tax is likely to cause even more wealthy to leave the UK and is likely to raise a small fraction of what is forecast.”