Budget 2014: Stamp duty clampdown on rich property-buyers

Chancellor George Osborne has vowed to put an end to the abuse of the residential property market by the rich buying expensive homes through companies.

From midnight on 19 March 2014, any purchase of residential property worth £500,000 or more made through a company will incur Stamp Duty at 15%.

The change is in response to government estimates that suggest around 5,000 homes are registered as being owned by companies in such a way that the owners avoid stamp duty and inheritance tax.

The homes bought are mainly in London and some are worth millions of pounds – £1.6 billion worth of these properties were bought in the last year alone, according to the Independent Newspaper and the Exaro website.

However, despite broad support for the rule change from property experts, many were disappointed that the chancellor didn’t implement further changes to Stamp Duty – specifically an increase to the £250,000 property price threshold at which the 3% rate of tax kicks in.

Paula Higgins, chief executive of the HomeOwners Alliance, said: "The chancellor chickened out on much needed reform."

She explained: "Stamp duty will treble over the next five years. The housing market is being hammered as the government is addicted to stamp duty. The astonishing rise in stamp duty has resulted in government turning a blind eye to hardworking families.

"What we didn't hear in the speech is that the government collected £6.9 billion in stamp duty in 2012/13, and will double this by 2015/16; and triple its takings by 2018-19 to a whopping £18.1 billion."
"By 2018, this will be nearly twice the amount raised from tobacco… The chancellor boasted in his speech that he was raising tax on tobacco, but it is really the homeowner that he is milking."

More about