Making a Strategy to Deal with Stamp Duty; Stamp Duty on Homes Worth Pounds 1 Million and above Is Due to Increase to 5 per Cent on April 6. Mark Wiggin of Strutt & Parker Considers the Implications: PROPERTY EXPERT
Mark Wiggin Hardly a month seems to go by without a tax hike of some kind: .rst it was VAT, then petrol duty and now stamp duty for houses over the million pound mark.
The in.uential Institute for Fiscal Studies has said that the variety of measures coming into effect in April will hit the rich most. But how much effect will the stamp duty rise really have, when it is introduced on April 6? If nothing else, it will serve to focus minds. We have certainly had both buyers and sellers asking about the change in the past few months. It remains to be seen whether it will have a signi.cant impact on pricing - creating any kind of vacuum between the pounds 1 million and pounds 1.1 million level.
There will be some small price impacts: if vendors have priced their property at just over a million, the buyer is likely to offer just that little bit more before the deadline to avoid having to pay the extra chunk when the deadline comes. But proportionately, the impact of stamp duty is far larger at the pounds 250,000 level.
We can't see the increase causing either a mad rush beforehand, or an uncomfortable hiatus and distortion of the market afterwards.
There has been some confusion and speculation about legal aspects of the change. Some people assumed that if you had already exchanged contracts, that would be enough to beat the deadline - but the Inland Revenue is clear that it applies on completion only. The only way round it is to take possession before completion, and that throws up a whole new level of complexity. …