Stamp duty overhaul could save prime London buyers £500k

The removal of stamp duty would be a “huge incentive” to attract buyers back into the prime London market, Jefferies founder Damien Jefferies said.

Prime property to benefit from reforms

Interest from international buyers in the prime London market, who have traditionally been attracted to the capital by the generous tax scheme and UK perks like schooling, has been dampened by the loss of those non-dom tax perks.

The value on offer has already begun to attract interest from the middle east, according to James Forbes, co-founder of London property advisory firm Forbes Gilbert-Green.

“There’s an obvious increase in activity… London is looking cheaper than it was,” he said.

An extra discount would almost certainly further fuel activity, according to Jefferies.

“Scrapping stamp duty would act as a significant incentive for homebuyers at all levels of the property ladder, but nowhere more so than in the prime London market, where this archaic tax grab equates to as much as half a million pounds on the average cost of a home in the capital’s most prestigious postcodes,” he said.

“[But] it remains to be seen whether the government will really remove it, given how much revenue it generates, and if they do, what will replace it,” he added.

It’s likely uncertainty will remain until the Autumn budget – there are rumours of multiple changes to property tax and incentives – and the prospect of a ‘mansion tax’ may even put some potential buyers off until the picture becomes clearer.

A selling tax alongside the overhaul of stamp duty, for example, would likely offset some of the gains as sellers price in the tax to their property value.

So while the gains on offer might be significant, it’s London’s prime lettings market rather its buying market that’s set to see the most gain in the short term as potential buyers wait and see what the Autumn Budget might hold.