The prime London property market could face "complete and utter collapse" as a result of the changes to stamp duty, a property specialist has claimed.
This follows Chancellor George Osborne's decision to lift the highest rate of stamp duty increase in 7% to 12% for properties above £1.5 million in his Autumn Statement last week.
The burden of this tax will increasingly fall on already overburdened buyers in London and the South East.
The luxury end of the London market has already shown signs of slowing lately, and that process could now intensify.
Especially since more expensive homes face a double threat from the mansion tax as well.
Naomi Heaton, chief executive of prime property specialists London Central Portfolio, has warned that people "who work really hard and are successful people" could end up paying 50% more tax.
"The main losers will be domestic buyers who are acquiring family houses in London and have intended to dive under the 7% stamp duty threshold and any potential mansion tax, by looking for a property between £1.5 and £2 million.
"They will now be facing up to a 50% increase on their tax bill, amounting to up to around a further £50,000.
"This is going to be a very tough ask, more than the £40,000 that was asked in 2013 for purchases over £2m.
"It is likely that this sector will completely collapse for the foreseeable future."
With London house prices up 20% over the last year, more families than ever before live in million pound plus homes, and will also be affected, she said.
Heaton added: "This is a London-centric tax and one in 10 households in London will be detrimentally affected, rising to one in two in central London."
Comments