Wealthy Property Investors Could Benefit Most From Stamp Duty Exemptions

by Jason Gorringe, Tax-News.com, London

30 November 2001

According to estate agents in the UK, the abolition of stamp duty on properties under £150,000 in designated 'deprived' areas of the country may not actually benefit the low income house hunters mentioned by Chancellor Gordon Brown in his pre-budget report on Wednesday.

Reports have revealed that in many of the 2,000 areas earmarked by Mr Brown, there are few properties worth more than £60,000 which was the old level of stamp duty exemption. This has led estate agents to the conclusion that in many of the areas mentioned, local residents probably won't get much of a look in on the remaining few qualifying properties.

Steve Williams, an estate agent in the South East coastal town of Brighton, explained the situation to The Times on Thursday: 'Less well-off local people won't even have a look-in in terms of getting up the property ladder,' he observed. 'The majority of properties round here remain too expensive for people on basic wages. It would be lovely for a low-wage couple to make a saving and pick up a nice starter home, but they won't be able to afford it.' He added: 'The real tax savings on £150,000 houses are going to be made by middle-class people after an investment.'

The Royal Institution of Chartered Surveyors supported the conclusions reached by many estate agents, and commented that the Chancellor's measures, which came into force today, will undoubtedly be exploited by middle class taxpayers looking to invest in a holiday home, or accommodation for university-bound offspring. Although the change will probably bring little benefit to the less well-off, the RICS admitted, it may help to gentrify some previously deprived areas of the UK.

Recommended