The “mansion tax” proposal refuses to die in UK politics, despite it having been mooted as a policy proposal several times, only to meet with strong opposition in some quarters. The latest expected proposal for a “super mansion tax”, by the Liberal Democrat Party – partners in the UK coalition government – has been sharply criticised by accountancy firm Saffery Champness.

According to media reports, the LibDems want to impose a 1 per cent annual levy on homes worth more than £2 million.

Ronnie Ludwig, partner in the private wealth group at Saffery Champness, said there are three problems with such a tax.

“A mansion tax, like inheritance tax, is potentially an insidious tax. Once the threshold is set it is unlikely to keep up with the true rate of appreciation in value of the properties concerned. At best the base for becoming liable will be increased by general inflation, at worst it will be frozen. The end result is that, over time, more and more properties will fall within the scope of the tax as property values recover,” he said in a statement.

“There will be serious regional differences. Properties in the South East, especially London where values are already very high, are likely to be hit disproportionately hard compared to comparable properties in other parts of the UK,” Ludwig continued.

“This could also act as a further deterrent to the UK attracting wealthy foreign entrepreneurs to come to the UK. These are the very people we need to attract here to start new businesses and create jobs, especially as we have a very attractive corporate tax regime compared to many countries. In that context the proposals seem counter-intuitive and unhelpful to the UK economy generally,” he added.

Taxes on high-earners and owners of large properties remain sensitive issues in UK politics; the government has lowered the top rate of income tax to 45 per cent from 50 per cent; it operates investor and entrepreneur visa programmes for wealthy foreigners entering the UK, and London is seen – despite tax changes – as a relatively welcoming place for high net worth residents. But as luxury property values have surged in recent years – albeit with signs of deceleration – it has led to calls for taxes on “mansion properties”.