Changes to Stamp Duty in 2014 upped the tax burden on luxury house-buyers, but for foreign buyers, the collapse in sterling since the Brexit referendum means that the tax hike has been effectively wiped out on a million pound house and greatly reduced above that, according to the Centre for Economics and Business Research (Cebr).
In its Forecasting Eye report, Cebr stated: “This should have led to a buying spree. Yet this - and a raft of other tax measures - means UK property is clearly less attractive than it used to be. Indeed, so few foreign investors have been enticed back to the UK property market that 2014 sales levels have not been regained.
“Yet stamp duty remains an issue for many domestic buyers. The problem was exacerbated by a further 3% surcharge on anyone buying a second home whether their original property was owned in the UK or abroad. In the year to Q2 2019, transactions of property worth over £2m were down 17% on the same period in 2013-14.
“Housing transactions have yet to recover from the crisis and were still a third lower in 2018 than in 2006. Moreover, 80% of property bought in 2006 cost less than £250,000 and was only subject to stamp duty of 1% or less. In 2018-19, even after attempts to make the tax fairer, just 63% of transactions fit this description.”