Sydneysiders would bear the brunt of a “divisive” new proposal to slug wealthy home owners with extra taxes, Domain Group data shows.

​While family homes are exempt from capital gains tax (CGT), a report suggesting sellers with homes valued at more than $2 million should be hit with the tax was released on Monday by left-wing think tank Australia Institute.

The report suggests the measure would raise $12 billion of revenue over four years, stating less than 1 per cent of owner-occupied house sales nationally were for $2 million or more in 2015.

Domain Group data found almost 60 suburbs with a median price of $2 million or more, with expensive real estate over-represented in the harbour city.

These suburbs include the prestige real estate markets of Darling Point, Bellevue Hill, Rose Bay and Vaucluse. The eastern and north shore suburbs were the most heavily represented on the list.

Home owners in suburbs that didn’t make the list would also be slugged with the tax, with asking prices for more than 1500 homes at $2 million plus on the market in the Sydney region.

Suburbs with fewer than 10 sales over the September quarter were not included in the list, but had it had enough sales, Prime Minister Malcolm Turnbull’s neighbourhood, Point Piper, and many other tightly-held enclaves would also have medians above $2 million.

St George senior economist Hans Kunnen​ said the concept that Sydney home owners would face a bigger burden than other states and territories under a $2 million rule was a “reasonable proposition”.

Instead, the idea that your home would have to be a ratio of the median price to be eligible for CGT would be fairer, he said.

But he warned taxing the family home, regardless of the price point put on it, would be “divisive” and would require a “brave politician”.

It could prompt the question over whether taxing capital gains should lead to allowing tax deductions on home-related expenses and it could result in home owners being less inclined to renovate and add value to their properties, he said.

“More tax exemptions would make the system more complicated and this whole process is about simplification,” Mr Kunnen said.

Despite the difficulties in the suggestion, he said there was no reason it shouldn’t be considered as part of the taxation discussion.

“Super is a sacred cow, GST is a sacred cow, the home is a sacred cow – we’ve got all these sacred cows running around and we should consider all of them.”

Steven Rowley, associate professor and director of Australian Housing and Urban Research Institute’s Curtin Research Centre, said the proposal could also result in home owners in large, expensive properties keen to free up the equity in their homes being discouraged from downsizing.

“I’m not sure how much support it would get given the property holdings of many politicians,” Mr Rowley said.

“There would inevitably be ways found to get around the CGT liability and those with significant resources are the most likely to be able to exploit loopholes,” he said.

“The introduction of a threshold at whatever price point will inevitably distort behaviour around that threshold.”

For many buyers of higher-priced property, the $2 million threshold might not be a deterrent, HSBC chief economist Paul Bloxham said.

“People who buy in the upper end might just absorb [the extra cost],” he said.

“Economic literature tells you the most efficient taxes are those on land, but while this may be efficient in theory it’s politically very challenging,” Mr Bloxham said.

The proposal has so far been rejected by Labor, with a spokesman for shadow treasurer Chris Bowen claiming it was worth investigating the 50 per cent capital gains tax discount applying to rental properties instead, as well as negative gearing rules.

Real estate industry veteran Robert Simeon, of Richardson and Wrench Mosman and Neutral Bay, said the proposal is “fanciful” in an election year.

“[It] is globally acknowledged where any tax imposed on the principal place of residence can only occur when that investment actually becomes a tax deduction for all monies invested in that particular asset,” Mr Simeon said.

“For such a proposal to remotely become a distinct reality an entire remodelling of Australia’s taxation system would be required,” he said.