Politics, Policy and the Battle Against the ‘Mansion Tax’ : December 2014 Stamp Duty Changes

  • By Jake Russell
  • 16 January 2015

Prime Central London property has unabashedly outperformed, with the exception of classic cars and fine wine, all other sectors of what has otherwise been a languid economic recovery and by virtue of this, provoked to varying degrees, covetous contempt. You have no doubt encountered in healthy measure the political manifestation of this in the proposal of the ‘mansion tax’ and other variations of a tax on property.

It is an idea that has gathered momentum and captured the imagination of those who have suffered greatest at the hands of the economic crisis, acting as a cathartic exercise designed to sate the appetite for retribution. An indignant Robin Hood springs to mind.

It is, however, vitally important – we feel – to emphasise that such a proposal exhibits a flagrant disregard for the long-term well-being of London and in turn our country as a fertile and alluring home, where one can put down roots, for the world’s greatest and most industrious businessmen and women, who bring with them many positives for our nation. We must take heed of the consequences of the heavily socialist policies of Francois Holland, which have so efficiently driven away the bright and brilliant offshore in France.

The latest stamp duty changes, effected in December of 2014, appear to be a combative piece of politics on behalf of the Conservative party that presents a measured and sensible alternative. It taxes the incoming purchaser who one assumes can, reluctantly, afford it (particularly since the change only becomes more expensive at £937,500). It is an adjustment in overall transactional costs that has to be evaluated and considered prior to purchase, and can therefore be avoided if necessary. It does not penalise the asset-rich cash-poor and does not indiscriminately punish those British citizens who have had the good fortune to unwittingly benefit from ownership of properties that have risen in value as our country has prospered.

What effect it will have on our market is not yet clear. It is a safe guess that rising frictional costs is likely to hamper volume of transactions. With the balance of supply and demand currently favouring the purchaser, it is also likely that the cost will be absorbed by vendors, precipitating a market wide price adjustment, southwards.

Here, below, are the tiers and breakdown of the new rules outlining these changes to the structures of our new SDLT (Stamp Duty Land Tax).

Residential Property Stamp Duty Land Tax (SDLT)

Purchase Price of Property

Rate of SDLT (% of portion of purchase   price)

£0 – 125,000

0%

£125,001 – £250,000

2%

£250,001 – £925,000

5%

£925,001 – £1,500,000

10%

£1,500,001 +

12%

Due to the nature of the more complicated tiered system, we have devised a stamp duty calculator which is available on all sale properties on the Russell Simpson website. Alternatively, Click Here to visit the dedicated page for our Stamp Duty Calculator. 

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