Higher taxes have stomped on the prime London property market, forcing the number of sales to dive by one-third, commercial real estate firm DTZ said yesterday.
Changes to stamp duty in December’s Autumn Statement mean that homes worth below £1m received a tax cut, but those at the very top end of the price scale have to pay a far bigger levy.
Under the tax changes, the average London home selling for £510,000 saw its tax bill cut by £4,900. But a property worth £2.1m saw its tax bill rocket by £18,750.
In the first quarter of 2015, there were 638 prime London transactions, down from 949 in the same period a year earlier – a fall of 33.1 per cent.
And the stamp duty haul raised from those sales fell from £125m to £93m, down 25.6 per cent.
“Although the new progressive banding has led to a 10.3 per cent increase in the amount paid in stamp duty per property, the Treasury has so far lost out considerably,” said DTZ’s David Ramsdale. “The prime central London property market could further be impacted following the General Election should the Labour Party ... introduce a mansion tax.”