UK property tax increase unlikely to hit prime real estate market

The increase in Stamp Duty in the UK is unlikely to have much of an impact on the high end of the property market in terms of prices, research suggests.


From April 6 this year those buying properties worth £1 million or more will see the amount they pay in stamp duty rise from 4% to 5%, but research from Investec Specialist Private Bank amongst estate agents, property developers and mortgage brokers specialising in this market reveals that 52% expect this to have no impact on prices.
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 (CGT) 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.
‘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,’ said Jack Jones of Investec Specialist Private Bank.
‘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,’ he added.

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, some 34%, are actually now more optimistic. Investec says this helps explain why one in four, 75%, don’t believe that a ‘bubble’ is developing in the million pound plus residential property market.
Investec recently launched a £Million Plus mortgage targeted at high net worth professionals who do not get paid along conventional lines, but rather accrue irregular income such as lump sum bonuses. The new custom made mortgage offering takes overall income and wealth into account rather than just the value of an individual’s property and their regular monthly income.
The £Million Plus mortgage is aimed at the top end of the market, with loans available exclusively to individuals looking to borrow a minimum of £1 million with sustainable earnings in excess of £300,000 a year and an established balance sheet in excess of £3 million.
The mortgages may be secured against a variety of assets including property, shares, investment holdings and offshore deposits, and are available in a number of currencies. The offering is not limited to UK nationals and includes the purchase and refinance of UK property residence and investment properties.

Courtesy : propertywire

Tuesday, 25 January 2011 : sell house fast