The Liberal Democrat party announced earlier this week that it is proposing an annual 0.5 per cent property tax for homes worth over £1 million.

It has been suggested by Treasury spokesman for the organisation Vince Cable that the move can help others out of taxation.

However, the move would leave many high-end private landlords and property owners with further expenses to pay.

Ed Mead, director of Douglas &Gordon estate agent in London, where a high percentage of such properties are located, said that his initial reaction as an agent is to say that the proposals would have a negative impact on the top-end housing market in the capital.

"I think that is quite a heavy weight [and] will make a significant difference to people's decision as to whether they buy an expensive house or a small house,"he explained.

Mr Mead added that a situation could arise where people try to "fudge their way around"paying the tax, in a similar way that they attempt to avoid stamp duty thresholds.

Written by Claire Doyle
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