The FT reports that figures compiled from the UK’s three largest upmarket estate agents, have revealed an 80% drop in the number of homes over £2m being bought through corporate vehicles since March’s Budget.
A 15% stamp duty tax on company-based property transactions is cited for the decline. The Treasury is expected to reinforce the stamp duty increases today, with an annual levy of near to 1% on homes held in corporate structures.
The FT also examines how tax professionals have already begun planning the different options their clients can take before the Government’s stamp duty changes come into force next April.
The paper believes that the introduction of an annual levy and changes to CGT charges will make owning property through company structures far less attractive non-UK residents.
Source: Financial Times
We say: Asserting that introducing a penal SDLT charge and an annual ownership charge tends to make buying property in a company less attractive might be regarded as a statement of the bleedin’ obvious.
It can be a particular problem for property developers buying a big house to convert or demolish, who we think were never really intended to be caught.
With care, the problem can be avoided but it would have been far better if the SDLT penalty had been properly targeted in the first place. As to the other changes, ask us again this afternoon after the draft legislation has been released.