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The mere suggestion of a 'mansion tax' to be imposed on properties worth more than £2 million is a disaster.
The upper end of the housing market has frozen – paralysed in panic as it stares down the barrel of a shotgun after reports of the Government's plans. The idea of being saddled with an annual tax that amounts to 1 per cent of your house's value above £2 million is iniquitous. Our homes are not the Government's piggy banks.
I'm seeing the immediate damage on all sides, with intense distress and anxiety suffered by homeowners, as well as builders and estate agents. How could the Cabinet have failed to realise what the consequence of these rumours would be?
It's hard to conceive of a more catastrophic proposal by the Chancellor of the Exchequer. My objections are totally apolitical: similar taxes were mooted by Lib Dem leader Vince Cable and Tory Chancellor George Osborne during the Coalition government about a dozen years ago and they were equally stupid and nearly as destructive.
But what Rachel Reeves has done – exacerbated on Monday by Housing Secretary Steve Reed's refusal to quash speculation – is beyond comprehension.
She is threatening to bring in an unworkable tax that will punish mortgage payers, drive pensioners out of their homes, divide the country geographically, deter the flow of wealth into Britain, put countless people out of work and very probably push the economy even faster into recession.
For a start, almost nobody dares move or plan an extension right now. This is most true in the south-east, the location of more than 80 per cent of properties that sell for £2 million and above.
But it applies across the UK, because everyone is aware that what affects the Ponsonby-Smythes today could hit the Smiths and Jones tomorrow.
A few days ago, I was filming in the north of England with a couple who have sunk their whole lives into improving their home. They haven't had a holiday, they told me, for five years – they've even sold their campervan to fund the renovations.
Although they are doing as much of the work themselves as possible, every penny they can spare is being spent hiring carpenters, plumbers, plasterers and electricians, and on all the materials they need.
When the building is finished, they'll need to decorate and furnish their lovely reimagined home.
I admire them hugely. But who in their right mind would make such sacrifices, if the end result was to increase the value of their house so much that they couldn't afford to live in it?
Average property prices in the north are not in the danger zone yet. But one thing we've learned in the past decade is that, if tax thresholds remain the same while inflation soars, more people every year are sucked into the upper bands.
It's quite conceivable that, in time, a good-sized family home anywhere in the country could qualify as a mansion.
That's already true in London and the commuter belt. A three-bed flat in Fitzrovia can easily cost £2million, as can a four-bed house in Guildford – neither of them 'mansions' by any stretch of the imagination. Slapping a 1 per cent annual duty on the value of such properties will provoke an exodus from the south-east. The effect on the entire economy of the capital is incalculable, but one thing is certain: house prices will tumble.
That will create a storm of appeals over HMRC valuations. I have no idea how the tax office is going to come up with accurate assessments of every house in the country, but any twit can see that if half a million people contest their valuations, the system will melt down.
And what of those families who can't move? On a £3 million house, the 1 per cent tax will cost £10,000 a year. Very few people can shrug that off – certainly not those paying eye-watering mortgages.
What are they supposed to do? Demand a pay rise to cover it? With top rate income tax at 45 per cent, they'll need an extra salary of nearly £20,000. When that isn't forthcoming, they will be forced to make stringent reductions to their living expenses.
In every case, it's the local economy that will suffer. People will stop eating out, going to the cinema, supporting High Street shops and giving to community charities. They'll cut back on the cleaner's hours and stop having a chap in to help with the garden once a month.
Some who can't afford such things might sneer. But you can bet the cleaner, the shopkeeper and the waiters will not be applauding.
Anyone who has run a small business will know how this works. But I don't see many like that in the current Cabinet. They talk about 'working people' but they don't know what the words mean.
We've already seen how contemptuous they are of pensioners.
The winter fuel allowance was the first target in their sights, though they had to back down when it became clear how unpopular that cutback was.
I don't believe Rachel Reeves has stopped to consider how impossible a 'mansion tax' will be for the elderly, living on their savings. Many are relying on the value in their properties to pay for their final years, when they are obliged to give up their independence and move into care homes that might charge £1,000 a week or more.
Not only will they suffer the cruel indignity of leaving their familiar surroundings, but likely a stiff financial loss on the sale of their house in a less favourable market that could mean all the difference for their future plans. Those homes double as pensions and insurance policies against the cost of care and the Government has no right to sequester them.
I always imagine the housing market as a living creature. It has to be healthy, with a strong, beating heart and quick, alert reactions.
Right now, it's cowering. Its extremities are weak – in the most disadvantaged parts of the country, the market is already moribund. And a dying house market means the whole country is diseased.
Rachel Reeves doesn't share my view. She sees the housing market as a shiny piggy bank with the nation's savings locked inside.
And she wants to take a hammer to smash it to pieces.
Once that happens, it will be shattered beyond repair. And our whole economy will be broken.