Changes To Stamp Duty and Re-evaluation of Council Tax Bands

Government warns high value home owners to prepare for further taxation

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The stamp duty on homes over £1 million will rise 1% to 5% from 1st April 2011. Introduced by the then Chancellor Alistair Darling, the increase was said to help make up for the rise in the threshold of tax duty exemption from £125,000 to £250,000 aimed at helping first time buyers get on the property ladder.

However this week saw two top Liberal Democrats call for further tax to be levied on high-value homeowners to offset the scrapping of the 50p rate of tax.

Deputy prime minister Nick Clegg indicated that there would be further changes to the structure of stamp duty and council tax bands could be reevaluated so those with high value properties will pay more

Chancellor George Osborne said in his Budget speech that: “There’s one area that needs extra work in the coming months, and that’s on the taxation of very high value property, where evasion and avoidance are widespread and some of the wealthiest are not paying their fair share...we will also be redoubling our efforts to find ways of ensuring that owners of high value property cannot avoid paying their fair share.”

Before the election in May 2010, Labour were accused of being ‘cynical’ with their suggestion of taxing wealthy home buyers who 'tend not to be their core voters' however, Conservatives did not oppose the rise in stamp duty and said that they would not reverse the decision if elected.

Some estate agents believe that the hike will 'distort' the market warning there will be pressure from buyers to reduce asking prices below the new £1m threshold to avoid paying the extra stamp duty. Others agents have welcomed the news. So what does it all mean for Chiswick?

Using Land Registry figures,’s latest property sales show that a total of 78 properties had changed hands in W4 between 1st October 2010 to 24th November 2010.

Of these 78 properties, nine were sold for more than £1million and three were sold for under the £250,000 stamp duty threshold.

The average price of a home sold in W4 since the end of the third quarter of 2010 is £638,778, compares to £669,548 for the period July-September 2010, meaning the average Chiswick home will remain subject to a stamp duty of 4%.

March 29, 2011