England, Wales and eventually Scotland (April 1st 2015) have seen a substantial reform on Stamp Duty announced in last week’s Autumn Statement. The distorted old system was well overdue for a restructure and was previously classed as medieval – considered the most damaging tax of all, described by the Chancellor.
The aim of the new system? To fulfil the common aspiration of being situated on the UK property ladder at a more accessible and affordable price. It promotes fluid property transactions at the lower end of the market.
The question is this; how will the top end of the market react to these changes? It could be argued that, on a domestic basis, the Chancellor could be shooting himself in the foot. The new structure will undeniably deter the top end investors whether it is foreign or internal. Stamp Duty will be cut for 98% of people who pay it – this is something that cannot be contended with. The new tax structure will in turn increase revenue sales.
When referring to an average family property price in the UK at £275,000 home buyers are saving £4,500 in comparison to the old Stamp Duty. But moving up a few tax bands, prime central London property has reached a record high of £1.6m. At a new rate of 12% for £1.5m and over there is no denying the top end of the market is going to be left with more of a hangover than before. Said to be a Robin Hood style approach; this hopefully puts a conclusion to the argument of under-taxed high end properties and the case of Mansion Tax.