The number of high-end homes held under company names has fallen to just 0.2 per cent of the UK's total house stock, according to new figures by a leading asset manager, in a sign that government efforts to clamp down on owner-occupiers using vehicles to buy property is paying off.
London Central Portfolio (LCP) chief executive Naomi Heaton said that its analysis of figures released by HM Revenue & Customs (HMRC) show that just 3,990 properties are owned by non-natural persons, or companies – down 6.4 per cent on the previous year.
Around 63 per cent are valued between £2m and £5m, 23 per cent are valued between £5m and £10m and 14 per cent are worth £10m or more, LCP said.
Since 2012, George Osborne has introduced a string of taxes aimed at quashing investors who buy homes through company structures, starting with a 15 per cent stamp duty on £2m-homes introduced in 2012.
An annual tax on enveloped dwellings on properties also over £2m came into force the following year and was extended to homes worth over £500,000 in 2014.
The HMRC figures show that tax raised £116m for the Treasury in 2015, with London accounting for 89 per cent of receipts. Westminster property owners alone paid £60m in tax. The rest of the south east accounted for 10 per cent of receipts while just two per cent came from the rest of the UK.
"Overall, it appears that the high levels of taxation for properties bought in corporate wrappers is beginning to outweigh any tax planning benefits, with a six per cent fall in the number recorded in 2015 compared with 2014. De-enveloping – dropping properties out of NNPs and into personal names – has begun to take place, in line with the chancellor’s declared intentions," Heaton said.
She added that this was further supported by separate figures showing a hike in the number of London properties over £10m registering on the Land Registry, from 13 in 2011 to 65 in 2015, saying: "Previously, many of these properties would have been acquired in corporate wrappers and hence not recorded at Land Registry."
Meanwhile properties bought in corporate envelopes for commercial purposes, such as rental or development, currently stands at 3,040, LCP said. These properties are usually owned by the likes of pension funds and investment schemes and do not have to pay the tax but are required to notify HMRC.