The reason is even more strange. The purpose of this tax is not even to fund the funding to build new cities, or to make existent council housing better, as it is it to supposedly fund the NHS.
It’s a bad policy for many reasons. Considering the high value of housing in London and how even modest properties had taken an exponential amount of value in recent years, the vast majority of people targeted with this tax will be in London. And yet, for a London pensioner who had bought his house decades ago, it’s not extraordinary to think that the housing value had went so up in recent decades that someone could have a house worth 2 million pounds today which was bought at only a fraction of the cost.
This tax also bring another problem. Let’s say you are a senior on a fixed income who own a property bought decades ago in Central London, and this same house is your main source of collateral, how will you pay the tax? Unlike a very rich person, you don’t have in this case a playing room for disposable income, so the only option would be to sell your home even if you were a smart investor while you bought this home and lived in it when it took a lot of value with time.
In a place like London, this could well means that the only people who would have enough disposable income to pay this same tax would be very rich people from the UK or aboard who use their London housing as a sort of investment and/or as a sort of pied à terre.