Tax increases will have little impact on high end property
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From April 6 2011, those buying properties worth £1m or more will see the amount they pay in Stamp Duty rise from 4% to 5%, but research from Investec Specialist Private Bank reveals that 52% expect this to have no impact on prices.
It surveyed estate agents, property developers and mortgage brokers specialising in this market. Some 45% expect prices to fall slightly as a result of this, but none of those interviewed believe there will be a sharp fall as a result of this rise in Stamp Duty.
Similarly, 55% of these property specialists interviewed believe that the decision to raise Capital Gains Tax from 18% to 28% last year for higher rate taxpayers has had no impact on prices in the high end property market. However, some 41% think they have fallen slightly as a result of this, and only 3% think that this change has resulted in a significant fall in prices.
Jack Jones of Investec Specialist Private Bank, says: “The high-end property market appears to be quite robust to adverse changes in tax. This is probably because the market is still seen as being very attractive, with opportunities for both British and non UK buyers. The sector is very different to any other residential property market, and this is demonstrated in its recent strong show of resilience. Sales are still strong and demand for million pound plus properties although down, remains high.”
Indeed, Investec’s research reveals that only 41% of estate agents, property developers and brokers specialising in the million pound property market are less optimistic now about it than they were before the credit crunch.
One in three - 34% are actually now more optimistic. This helps explain why one in four - 75% don’t believe that a ‘bubble’ is developing in the million pound plus residential property market.
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