CELEBRITIES can be expected to inveigh against a right-wing government. But a proposal by the opposition Labour Party to tax houses worth over £2m ($3.1m) has brought the Louboutin-heeled out in force. Angelina Jolie, an actress, says it might prevent her from buying a British home. Myleene Klass, a singer, fears for the “little grannies” the tax will supposedly hit. This week two think-tanks, the Centre for Policy Studies and the Centre for Economic and Business Research, joined the celebs in bashing the proposal. But Labour’s mansion tax is based on sound principles, even if deeply flawed in the details.

An overhaul of property taxes is overdue. Council tax, an annual levy on homes to pay for local government, relies on valuations from 1991. Properties that have most soared in value are scandalously undertaxed. A seven-bedroom house in Kensington worth £13m incurs a £2,100 bill, scarcely more than is paid on many two-bedroom flats. Even on the old valuation, the tax is regressive. On average, a house in a high band attracts a charge worth just 1% of its 1991 value, compared with 2% for a middling home, says Stuart Adam of the Institute for Fiscal Studies, another think-tank.

If done well, annual property taxes are highly efficient. Unlike stamp duty, a tax paid only when a house changes hands, they do not discourage transactions. They are difficult to avoid: unlike a hedge-fund, a house cannot move to Switzerland. And many people have been enriched by the gentrification of their neighbourhoods, not by hard work. Their unearned wealth is a prime candidate for taxation.

Labour wants owners of houses worth £2-3m to pay an extra £3,000 per year, with stiffer charges for more expensive homes. Ed Balls, the shadow chancellor, reckons this would raise £1.2 billion for the exchequer. His proposal is popular: 65% are in favour, says Patrick Briône of Survation, a pollster, making the tax more popular than a referendum on EU membership.

Some complain of regional iniquity: four-fifths of houses caught would be in London, according to Lucian Cook of Savills, a property company. Opponents like Ms Klaas point out that in the capital, £2m buys you far less than a mansion. That does not worry economists, who measure wealth with prices, not floor space. And Labour would allow cash-poor grannies to defer payment until they sell or die.

Labour has not said how it would tax the most valuable homes, but Mr Cook’s sums suggest the bill might reach as much as £125,000 on a £20m property if Mr Balls is to hit his revenue target. Mr Cook says that seems punitive. But as a proportion of the value it is not far from what the average homeowner pays in council tax. A bigger problem is implementation: the difficulty in valuing expensive homes means that owners may dodge the tax or ring their lawyers. A tax that suddenly appears at £2m is clumsy and could distort incentives: developers might well try to avoid crossing the threshold.

Much better would be an overhaul of council tax, both to update valuations and to introduce higher bands. According to a recent poll, nearly 70% of MPs agree. The Lib Dems—from whom Labour pinched the mansion-tax policy—have come round to this view. Change would be painful, though: losers from a revaluation would be found in houses of all sizes. The last government abandoned a planned revaluation in 2005, perhaps fearing a backlash.

Either reform would immediately hit valuations of the costliest properties, as the market priced in the future tax burden. Subsequent owners would pay the tax but save on the initial purchase price, making the tax a bit like a one-off levy on current owners. That makes the outcry from the A-list unsurprising. For mansion owners, now may be a good time to sell up.