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Guaranteed rent | Budget 2012: will the stamp duty reduction of the UK housing market?

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“The United Kingdom already imposes the highest property taxes in the world, as a share of GDP, with the upper end of the market bears the greatest burden,”, criticizes Nicholas Leeming, from online property firm Zoopla.co.uk. “The introduction of this criminal seven percent stamp duty rate is vitiated by error and wrong, in our opinion.”


What’s more, it could encourage foreign buyers to start looking for other places to invest, reports Peter Rollings, chief executive officer agents Marsh and Parsons.


“This policy will disproportionately targets London, where House prices are in a League of their own,” he said. “It threatens to kill the goose, contains the golden eggs.”


At the same time delivering a sharp bite to the hand that feeds, the increase in stamp duty, its critics claim, however, is toothless.


“Our research suggests £ 1.5 billion is an overly optimistic estimate of revenue scheme will travel,” said Richard Sexton, Director of e. surv Chartered Surveyors.


Other experts believe that increased stamp duty will prove a disadvantage to affluent buyers, rather than a serious repellent.


“I doubt seven percent stamp duty will postpone a serious buyer,” says James Wyatt, Executive Director of the Surrey-based agent Barton Wyatt. He often sells £ 8 million houses for foreign clients, both on the Wentworth estate and in St George’s Hill area of Weybridge (where the dwindling number of UK residents include Sir Cliff Richard).


Wyatt’s view is repeated by Louise Vaughan, London head of prospect property search. “Rich Russians are buying in London because they’re terrified Putin will make a kind of property screen. They know we got strong laws that can protect them, “she said. “They’re not going to be afraid of a two percent increase in stamp duty”.


In fact, many a Middle Eastern investor, recent years ‘ experience with political upheaval disturbing was that overseas buyers are not put off by mere price.


“The primary London market has absorbed a 42 percent increase in prices since 2009, so we believe that it will absorb the stamp duty increase,” says Liam Bailey, head of residential research at Knight Frank. “Said higher stamp duty means that there will be a greater incentive to improve properties rather than move up the ladder. Also, some wealthy buyers decide to save £ 59,000 in stamp duty by purchasing a 1.9 million pound House in the country, rather than a 2.2 million pound property in London. “


Even so, they can still be hit by budget, as renovations to listed buildings no longer tax exempt. It is a change that affects many less wealthy households, also. “Suddenly add 20 percent to the cost of repairs and modifications are going to destroy a lot of human plans,” says Kate Pugh, chief executive Heritage Alliance. “There will be a huge outcry over this.”


George Osborne has also introduced a 15 per cent stamp duty for those who buy through offshore companies. This will close a tax loophole. Nice idea, is the general answer, but their implementation will be the hard part.


‘ Policing repression will be difficult, and some transactions can slip through the net, ‘ says Nicholas Leeming, by Zoopla.co.uk.


“One option may be to force agents to declare sales prices,” suggests Edoardo Mapelli Mozzi, Director of the London Search agent Banda property. “But that would encourage off market offer”.


Lucian Cook, Director of residential research at Savills agrees: “For all the talk of eliminating the stamp duty evasion, this Move will give an even stronger incentive to property lawyers to dream up new, perfectly legal tax avoidance schemes.”


So will the higher rate stamp travel some extra revenue from the world’s wretchedness to poverty. But their inventive ways to minimize their tax liability can be difficult to curtail.


View the original article here


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