Wednesday 21 March 2012
Responding to today’s budget announcement on Stamp Duty Land Tax, Gordon Keenay, deputy head of KPMG’s stamp taxes group, commented:
“While the hike to a 7% rate on properties over £2 million comes as little surprise, the 15% rate applied to residential properties above £2 million bought by companies is drastic and will be a huge disincentive to people who trade companies rather than property.
“The so called ‘mansions tax’ is unlikely to have a huge impact beyond affecting price negotiations. If you’re in the market for a £20 million house in London, chances are you are still going to buy it.
“The 15% charge for companies is far more hard-hitting and will definitely deter people from holding property in this way. The commercial property market is unlikely to be affected as acquisitions of six or more properties stay under the commercial rules with a maximum 4% rate.
“A further sting in the tail comes from the capital gains tax measures introduced. This is essentially a new wealth tax and affected people could be hit by an annual charge up to £140,000 from 2013. This will come as a shock to people who already hold houses in companies which may not have been to avoid SDLT.
“Overall the expected additional revenue from the 7% and 15% rates is £150 million in the first year, swiftly rising to £375 million in 2016 which implies that the government is expecting many houses to go above the £2 million threshold in the coming years.”
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