Liquid error: wrong number of arguments (2 for 1) Estate Agent Today: New property taxes on super-rich could hit UK economy, warns agent | Marsh & Parsons Sales and Lettings Estate Agents London

Blogs, Press & Media

Estate Agent Today: New property taxes on super-rich could hit UK economy, warns agent

Thu 13 Dec 2012

Global celebrities and publicity-shy oligarchs could be among those deterred from bringing their wealth to the UK, following the latest Finance Bill.

The warning that the new regime will backfire has come from a leading estate agent, Marsh & Parsons, which says that it could have a knock-on effect on both the housing market and national economy.

Another London agent, Stanley Chelsea, yesterday evening sent out a satirical Christmas card with a two-part cartoon the first showing George Osborne gloating over a sackful of tax gained from foreign property investors, and the second showing him despairing over an empty receptacle.

The Bill will impose 15% Stamp Duty on the purchase of 2m-plus properties bought in the names of companies, compared with 7% on properties bought by individuals.

The Bill will also introduce a new wealth tax, the Annual Residential Property Tax, on properties owned by corporate vehicles.

In a third whammy, of which the detail is yet to be confirmed, there will be a new 28% Capital Gains Tax regime and it is not yet clear whether this will apply to all offshore company vehicles, or whether there will be any exemptions.

Super-rich house buyers wanting to mitigate their tax liabilities will either have to use their properties as rental investments or, if they want use of the property themselves, have to sacrifice their anonymity and purchase in their own names.

But Peter Rollings, CEO of London agents Marsh & Parsons, said: Those using a company to protect their anonymity whether celebrities or oligarchs will be among the big losers.

Many buyers use special purpose vehicles to defend their privacy when they buy in the UK, rather than simply to avoid Stamp Duty charges, and the financial cost now involved in doing so is likely to act as a strong deterrent.

While the changes are broadly as expected, the concern is that the generally heavier-handed approach from the Treasury towards the upper end of the housing market including the higher Stamp Duty tax on homes worth more than 2m at the last budget will send the message that the UK is increasingly unwelcoming to high net worth buyers.

If the cumulative effects of government tax policy artificially stop the wealthy be they foreign or British from buying in the capital, it will be to the detriment of the economy as well as the housing market.

We should be persuading much-needed wealth creators to come to the UK, along with the business, employment and consumer spending they bring, rather than encouraging them to stay away.

Concern has also been expressed that the reliefs available to purchasers of 2m-plus properties if they use these for rental purposes will not kick in until next summer.

On the current timetable, the exemption to 15% Stamp Duty will not be available until July 2013.

Click here for original article

Contact our office

Close

Contact our Lettings team

Close

Contact our Selling team

Close

Contact our About us team

Close

Contact our Corporate Services team

Close

Contact our International team

Close

Contact our Land and New Homes team

Close

Contact our Professional Valuations team

Close

Contact our Professional Services team

Close

Contact our Property Management team

Close

Contact our Riverside Properties team

Close

Contact our Career team

Close

Contact our office

Close

Request a viewing

Close

 

Close

Share this with a friend

Close