Pity, if you can, the unfortunate oligarch, or any other extremely affluent rich collector of homes in London and the shires.
He now faces a 15 per cent stamp duty bill should he wish to pop his recently acquired Mayfair penthouse into an offshore company to conceal details of its ownership from prying eyes. The manoeuvre would also leave him liable to the mansion tax to be introduced next year. If the apartment proves insufficiently roomy for our loaded man’s needs, capital gains tax would be payable on its disposal.
Purchasing £2 million-plus pads near by for his student offspring would result in more stamp duty — at the new rate of 7 per cent on homes in this price bracket. These deals may wait until the values of these flats drop to just below £2 million. Some family houses about to come up for sale in smart London suburbs have already been marked down in this way in expectation of Mr Osborne’s move. It was thought that buyers who may have been prepared to cough up £100,000 in stamp duty for a £2 million place would balk at an increase to £140,000, although some will conclude that this is still cheaper than renovating their existing residence.
The online stamp duty avoidance schemes for these affluent middles were outlawed by the Chancellor, so this tax-saving route has been slammed shut. It remains to be seen whether the Budget changes will slow our oligarch’s pursuit of deluxe Brit dwellings. He may, for example, go off the idea of a stately pile because alterations to such listed buildings will no longer be zero-rated for VAT. However this man is still likely to conclude that London remains the safest place for his loot. Meanwhile, his accountants will be seeking out ways around the new rules.
This is yet another reason why one group will not feel sorry for him — the millions excluded from the housing ladder. The £250,000 stamp duty concession for first-time buyers will be withdrawn on Saturday.
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The Government’s NewBuy scheme will help those looking for a new-build home but it is not a replacement for this incentive. The Budget contained no measures to stimulate much-needed investment in rental homes although affordable accommodation of this type would aid labour mobility.
This dispossessed generation may take some temporary delight at the squeezing of the super-rich. But they deserve some permanent solutions for their problems.