According to a study by London Central Portfolio, the property group, the amount of Stamp Duty Land Tax (SDLT) collected by the government since its introduction in April last year, has fallen by around £500m.
Anyone buying a second home will face paying an extra 3% SDLT. However, rather than increase the amount of tax, the move has resulted in a drop in the number of high end properties being sold. During the first six months of the new rates of SDLT, the reduction in revenue is due to a lower number of properties at £1m plus being sold, according to London Central Portfolio. The firm warned that by the end of 2016-17, the figure could even reach £1bn.
Sales of the number of properties which are worth £10m or more have fallen by 75%, while sales of homes worth between £5m and £10m have fallen by 51%. Data from the Land Registry also indicates that the number of homes worth between £1m and £5m have fallen by a third. It is believed that this could be due to the higher rates of SDLT that would be charged, which on a home selling for £10m, would be £1.4m.
Although this may seem as though it will only impact on those with high end properties, it is also having an impact on first time buyers, as the government pledged to use the tax collected to build affordable homes. CeMAP qualified mortgage advisers can help first time buyers to find a suitable mortgage for their requirements.
