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81pc of mansion tax properties sold in London – Mortgage Introducer

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The mansion tax will supposedly hit properties worth more than ?2m.

The estate agents Marsh & Parsons said the tax would not just affect cash-rich buyers and homeowners but long-term homeowners in areas which had seen rapid growth.

Figures from the Land Registry show that the average property now valued at ?2m in Kensington and Chelsea would have cost just ?392,082 in 1995, while the average London property in comparison would have been worth ?524,326.

In contrast the average property in England and Wales now worth ?2m was worth ?771,903.

If the rapid rise of house prices in central London continues and the ?2m threshold remained stationary, the average property in Kensington and Chelsea would be hit by the mansion tax in 2021.

Peter Rollings, chief executive officer of Marsh & Parsons, said: ?It?s clear that it?s not solely super-rich buyers who would bear the brunt of a new mansion tax but also long-term homeowners that may not be cash rich but happen to have lived in an area that has seen house prices climb rapidly.


?In effect such a tax would simply penalise long-term ownership in areas that are now highly sought after.

?At a time when the housing market is fragile, targeting the only vibrant part of the market is sheer folly and risks undermining London?s global appeal to wealth-creating business.

?The government should be considering how to boost UK?s housing market at all levels rather than considering any new deterrents to home ownership in central London.?

Rollings added that the current stamp duty tax was already outmoded and iniquitous and failed to take into account the volatility of regional house prices.

He said: ?An additional property wealth tax would only exacerbate the existing bias in the property tax system against London and the South East, where prices continue to rise while they weaken in other parts of the country.

?But there are practical flaws too. If an annual levy is to be accurate and fair, it would require regular revaluation to take account of changing house prices at a local level. Not only would the sheer logistics of this exercise be a costly undertaking but the tax could even stimulate price bunching under the threshold.

?It?s conceivable that buyers like families trading up would simply look to avoid moving into homes beyond the ?2m mark to avoid the added expense and vendors would have to price accordingly ? undermining the number of properties actually able to be taxed.?


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