The 2012 budget saw, as one of ultimately many controversial announcements, an increase in stamp duty land tax (SDLT) to 7% on properties above £2million.
The politics of this move was a pretty much undisguised hat tip to the Government’s Liberal Democrat contingent that, even today, are determined to pursue the owners of higher end properties for bigger taxes. The Mansion Tax may not have been introduced as the annual levy that Vince, Nick and pals wanted, however a 7% charge on purchase together with a 15% charge on company bought properties of that value, was some way close.
Exactly six months to the day since the introduction of the new rate, sales of £2m plus homes have plummeted by 23% in a market that is not exactly renowned for its buoyant volumes just now.
London Central Portfolio, the investment group, puts the damage to the economy as a whole from this reduction at around £1billion over the next five years in stamp duty, vat and income tax from employees that would otherwise have found jobs in the buy to let investment market that accounts for 50% of central London sales of this ilk.