Labour 's plans to change rules allowing wealthy foreigners to lower their tax bills is causing London property deals to fall through and homeowners to sell up , estate agents have claimed . Ed Miliband initially suggested he would 'abolish ' the non-domicile status on Wednesday should his party take power in the General Election on May 7 , but it later emerged he is effectively proposing a time limit on it of between two and five years . Although Labour aides suggested this would raise as much as £1billion , it seems the announcement has already had a negative impact on the capital 's property market . Scroll down for video . Rule change : Ed Miliband joined crowds in Warwick , where he announced his non-dom plans on Wednesday . Non-domicile status allows people living and working in Britain to only pay tax on their UK income , but not earnings from overseas . Ed Mead , executive director of London-based estate agents Douglas & Gordon , said there has been a huge increase in valuations because of Wednesday 's announcement - 37 in a month compared to the usual figure of about six . Speaking to MailOnline , he said : 'These are people who are saying `` we have finally had enough and we are going to value with a view to selling up and leaving '' . 'These people spend a lot of money in the economy . I do very much fear for the top end of the market . ' It 's claimed the announcement has already had a negative impact on the capital 's property market . Mr Mead , who has been working in the London property market for 35 years , explained it 's not just the top end that will be affected . He added : 'The London market is unique - it 's pulled from the top up . 'If you cut strings that 's holding the market up , everything else falls down . ' Charles McDowell , an independent agent hired by rich families in the capital , told the Financial Times that two deals he was involved in had fallen through this week because of Ed Miliband 's non-doms plan , while two families asked him to sell their homes . He told the paper : 'My clients feel under attack , they are not going to invest in London any more . ' Non-doms must prove that they regard a foreign country as their real home , but Mr Miliband argues that the tests 'are not very rigorous ' and can be granted to people who have a burial plot or property abroad . Newspaper reports suggested that non-dom rules would be scrapped by Labour altogether . But it emerged Labour would allow 'real temporary residents ' to take advantage of the rules - with the time limit to be consulted on . Luxury property : Ed Mead , executive director of London-based estate agents Douglas & Gordon , said there has been a huge increase in valuations because of Wednesday 's announcement . One Hyde Park : Mr Mead says he fears for the top end of the market but 'if you cut strings that 's holding the market up , everything else falls down ' In his speech , Mr Miliband said that everyone who has made Britain their permanent home should pay full UK tax on all their income and gains . 'It is not fair . It is not just . It holds Britain back . We will stop it . The next Labour government will abolish the non-dom rule , ' he said . The Tories pointed out that a five-year grace period would exempt up to six in every ten non-doms from the crackdown anyway , because many do not stay longer than five years . Tax advisers say driving non-doms away would in fact cost the Treasury significant sums . With non-doms paying around £8billion in tax and national insurance a year , it is claimed that Labour 's proposal could in fact create a huge hole in Treasury coffers . Within hours of announcing the policy , Shadow Chancellor Ed Balls was forced to admit he did not actually know how much extra cash the measure would raise . In a further embarrassment , it later emerged that just three months ago he himself had said such a move would be counter-productive – saying it would result in the country losing money . In a video that emerged yesterday , Mr Balls can be seen telling a local BBC radio station that abolishing the status altogether 'will probably end up costing Britain money because some people will leave the country ' .
Labour plans to change rules that allow foreigners to lower their tax bills . Non-doms only pay tax on their UK income , not earnings from overseas . Comment: