Closing Stamp Duty loophole will help local buyers

What exactly does a ton of bricks feel like?

Any West London homeowner who dodged paying stamp duty by purchasing their house through a company is about to find out, according to the Chancellor George Osborne. And it could hurt.

In Wednesday’s budget, the Chancellor will try to close the loophole allowing wealthy homebuyers to avoid paying the top rate of stamp duty tax on homes usually exceeding £1,000,000. So every time a buyer snapped up a home costing more than £1m it has cost the Treasury five percent – or a hefty £50,000.

Now, Osborne is promising ‘punitive charges’ for buyers who cheated the public purse in this way. Living and working in a borough where £1m+ are more and more common, I can see how avoiding stamp duty distorts the pricing of the local property market for all buyers – not just those with good accountants or offshore holdings.

Hopefully this move should restore, albeit briefly, some rationale to the prices of all homes in London.

 

And here’s more good news for local homeowners.

While the ink was still wet on the Chancellor’s latest budget, a senior Bank of England official said that house prices would continue to rise as demand outstripped supply as London’s population aged.

This is comforting news for anyone sitting on a pile of bricks. However, it’s a worrying thought for anyone trying to get onto the property ladder in West London as they face a double-whammy of rising prices and mortgage leaders requiring bigger deposits.

The answer? I think it’s high time we saw some new ideas to help first-time buyers invest in bricks and mortar.

After all, if house prices continue to rise faster than our pay packets, it makes home-ownership all but impossible for many young people.

On Saturday, the stamp duty waiver for first-time buyers purchasing properties under £250,000 ended. On suggestion worth considering is to create a new band of stamp duty tax for first-time buyers between £250,000 and £375,000 of two per cent. Estate agent Beresfords think it could kick-start the economy by saving first-time buyers almost £4,000.

 

Finally, if all the money talk is getting you down, just enjoy the thought of the annual boat race, soon to grace the banks of Hammersmith and Fulham.

If you haven’t joined in the fun in Furnivall Gardens or Bishop’s Park before, this year’s race on April 7 will see Oxford try and retain the trophy they wrenched back from Cambridge last year.

The vantage point in Fulham is good because it’s near the start of the race, but I prefer the action at the midway point of Hammersmith Bridge, where the crews usually start to make their big moves.

And best of all, it’s free!