New agency's stamp duty question: "Do we need another property tax"

“Do we really need another tax?” - that’s the question from a new buying agency, querying why the government wants to introduce another stamp duty surcharge of one to three per cent on foreign buyers. 

Aykroyd & Co, set up by a former director of the central London estate agency VanHan, is led by Hannah Aykroyd. It’s based in Mayfair and operates as an advisory service to overseas buyers as well as domestic purchasers. 

“The concern is that even the proposing of this tax by government creates more uncertainty in an already unsettled market. This can lead to greater illiquidity that will frustrate everyone, not least of all the British home seller” says Aykroyd.

Her comments follow the pledge, given by Prime Minister Theresa May to the Tory party conference a week ago, that the government would impose a one to three per cent SDLT surcharge on foreign buyers.

“Transaction levels have already decreased on the back of two SDLT changes and prices have softened, so discouraging foreign investment will only lead to a further reduction in transactions, particularly in London” insists Aykroyd.

“The immediate and wider impact of this is clear when you consider the number of professionals involved in a singular transaction – from selling agents and buying agents through to lawyers, tax advisors, bankers, interior designers, architects, and many more.

“Furthermore, foreign investors are already likely having to pay the extra three per cent surcharge that was introduced in April 2015 on second homes and investments, so it seems rather punitive to introduce an additional layer … We understand how our buyers think, and many are currently weighing the negative of Brexit-fuelled market uncertainty and the cost of SDLT against the positive of softer prices” she concludes.