Labour's mansion tax could result in London sharing the same fate as Detroit in the US, the Telegraph said citing Deputy Mayor of London.
Victoria Borwick, the Deputy Mayor to Boris Johnson, the Mayor of London, warned that Labour Party’s plans to impose an annual levy on properties valued at $3.2 million and above can leave London resembling Detroit, which declared bankruptcy in July 2013.
“It is the perfect example of an 'industrial' city in a post-industrial world: high unemployment, rapidly diminishing population, a local budget deficit of over $160 million per annum, and the bankruptcy filing of the city in July last year with over $18.5 billion worth of debt,” Borwick said.
According to Strutt & Parker, luxury sales in the center of London are falling rapidly. Thus, transactions with mansions with a value in the range from $3.2 million to $8 million plunged 27% in Q3 2014 compared with a year earlier.
