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Research

Chrome November 2014 - Tax and regulatory news

The proposed extended controls on mortgage lending are likely to result in fewer mortgage approvals going forward.

Nick Barnes, Head of Research

Report Highlights

  • The controversy surrounding Labour's proposed Mansion Tax is gathering pace.
  • Members of the all-party Parliamentary group on housing and care for older people have recommended a Stamp Duty concession for older homeowners looking to downsize.
  • 89% of HMRC's £100 m revenue from the 2013/14 annual tax on enveloped dwellings (ATED) was collected from London properties.

The controversy surrounding Labour's proposed Mansion Tax is gathering pace. Hammersmith & Fulham's Labour council has rejected its party's proposed "Mansion Tax" policy saying the plans would affect its residents unfairly. The council recently passed a motion promising to "lobby against" the plans stating that they could result in "many local people being forced to move out of the borough". This follows news that several Labour MPs in London have also expressed concerns about the policy.

Members of the all-party Parliamentary group on housing and care for older people have recommended a Stamp Duty concession for older homeowners looking to downsize. The MPs' report, The Affordability of Retirement Housing, argues that many older people occupy homes that are too large, too difficult to maintain and too expensive to run. The MPs are therefore recommending removal of the 1% Stamp Duty band plus the creation of a "Help to Move" package, offering tax incentives and comprehensive financial advice for older downsizers.

89% of HMRC's £100 m revenue from the 2013/14 annual tax on enveloped dwellings (ATED) was collected from London properties. Owners of houses in Westminster contributed more than half (£52m) of the national total, while £28m was raised on homes in Kensington and Chelsea.

NB comment: Good news for pensioners and those approaching retirement age wishing to downsize in the form of the
proposals to grant SDLT concessions – although £250,000 (the upper limit for the 1% SDLT rate) won't buy much in
some parts of the country. Meanwhile, the proposed extended controls on mortgage lending are likely to result in fewer
mortgage approvals going forward. It is also not clear how this might affect first time buyers utilising the Help-to-Buy
scheme.


Download Chestertons Residential Observer - November 2014