Should we prepare to shed a tear or two for the poor old rich, many of whom seem to have taken up residence in lovely Oxfordshire houses ? They are, after all, scheduled to be targeted by a new property tax — according to proposals just released by deputy prime minister Nick Clegg.

Under his plan, a tax on expensive homes would replace the 50p in the pound higher rate income tax, now levied on people earning more than £150,000 a year.

On the plus side, the scheme would inevitably involve an overhaul of the current council tax system — which is by and large still based on valuations made 20 years ago in 1991.

On the minus side it would mean hitting elderly people who are house-rich, but cash-poor — those who have perhaps lived in the same home for decades, comfortable in the knowledge that their property is increasing in value beneath their feet and will, on the final day of reckoning, make a considerable legacy for their children, particularly as numerous schemes exist for minimising inheritance tax.

Under the present council tax system, whereby homes are put into eight different valuation bands, some (comparatively) modest homes in, say, North Oxford, could pay the same council tax as, for example, Blenheim Palace or Glympton Park.

In other words, middle class homes are being banded in with those of the super-rich — which hardly seems fair.

And as for some old people being forced to move home under Mr Clegg’s proposals, some commentators would question why not since they are taking up more space than necessary in an increasingly crowded nation in which, incidentally, only 129,000 new homes were completed last year — the lowest in a peace time year since 1923.

Max Tucker, head of the Oxford office of Savills Private Finance, said: “Stamp duty on property transactions over £1m will go up next week from four to five per cent.

“But this so-called Mansion Tax proposed by the Lib Dems is an entirely different matter because it will be ongoing, not a one- off.”

He added that sales in Oxfordshire of high-value properties were booming, particularly in North Oxford and the Cotswolds, with the estate agency side of Savills reporting there is not enough supply to satisfy demand.

That name, mansion tax, first cropped up in the Lib Dem manifesto.

It was then proposed that a one per cent annual tax be applied to houses worth more than £1m. It is now unclear whether the new proposal would or would not follow that lead.

The advantage of the proposed tax to the Exchequer is three-fold. Firstly, it is an obvious attempt to make the very rich, whether British or foreign citizens with property here, pay their fair share of the burden caused by the national deficit.

Secondly, it hits wealth and not just income and thirdly it would be hard to avoid the tax — after all, it is not exactly easy to hide a mansion.

Making the rich pay their share would certainly find favour in some circles in Oxfordshire, where Savills report individuals are having no problems raising mortgages of more than £1m — while the so-called “squeezed middle class” are having trouble either selling or buying more modest properties thanks to the credit crunch.

Mark Harris, managing director of Savills Private Finance, added 2011 has seen an encouraging start with plenty of activity, particularly at the top end of the market.

More lenders have come to the market, a number of whom are focusing on clients wishing to borrow more than £1m.

He said: “Our average mortgage arranged in this period has increased to more than £750,000 and despite the much-publicised talk of base rate increases, the majority of borrowers are electing to take advantage of low variable interest rates available.”

Hot on the heels of these mansion tax proposals comes news that the Government’s independent commission into the costs of care for the elderly may recommend a cap on the amount people pay themselves, as opposed to what the Government will pay for them.

The subject is linked to the proposed property tax because some older people could be forced out of their houses and into care homes.

The average price of a house in Oxfordshire is now £234,846 — but it seems many elderly people are reluctant to sell their homes in order to pay for care in old age, even though the average cost of an annuity that could pay for such care is £85,000 — and therefore affordable for many Oxfordshire house owners willing to sell up.

The largest provider of such annuities is Partnership which is currently lobbying the Government to make clear exactly how much the state will pay in the future towards care bills, and how much it expects the individual to pay.

David Reaves, spokesman for Richmond Homes, owners of the “retirement village” development at Letcombe Regis, said: “Certainly on the care home side, most people will indeed sell their homes in order to pay for long-term care.”

All in all, as Lucian Cook, director of research at Savills, said: “We must wait and see whether this tax becomes a reality. At the moment it is not clear whether the mansion house would apply to properties over £1m or over £2m.

“But already, even the suggestion of such a tax is likely to temper growth in the high value house sector and that will have a trickle-down effect on the whole market — which we do not need at this point in the recovery.”

He added the tax would also mainly apply to properties in the South East, for example in Oxfordshire, and the gains would then need to be distributed throughout the country.

He said: “We simply do not know enough detail yet. But would the owner or the tenant pay the tax?

For instance, who would pay the tax on Number 10 Downing Street?”