Stamp Duty burden stacked on high end buyers, claims consultancy

High end purchasers of homes in London paid 15 per cent of the stamp duty in 2020, yet the value of the transactions accounted for only 0.2 per cent of residential sales.

The stats, produced by high-end mortgage broker Enness Global Mortgages, drew the line at £3m and above for its classification of expensive homes. 

The research shows that across the market in England, £2.9 billions was paid in stamp duty in 2020 in 468,929 transactions, with a total of £1.2 billion saved as a result of the holiday beginning in July.

As much as £436.4m of this was paid on transactions of £3m or above, meaning the prime market accounted for 15 per cent of all stamp duty in England. This is despite this coming via just 846 property sales, accounting for 0.2 per cent of the entire market.

Enness says London saw 675 properties sell for £3m or above last year - accounting for 80 per cent of all prime transactions but just 0.1 per cent of all homes sold across England, including those attracting no stamp duty at all.

The firm also says that while the domestic stamp duty holiday has now been extended into a two-phased additional six months, there is no such extension for foreign buyers. On top, they will from April 1 face an additional two per cent SDLT surcharge.

Islay Robinson, chief executive of Enness Global Mortgages, says: “Those transacting at the very top-end are far better placed to stomach these costs and so a stamp duty saving hasn’t been a driving factor with regard to transacting, nor has it caused the mad panic to complete that we’ve seen across the regular market.

“The prime market is arguably better off as a result and we’ve seen a quality over quantity approach continue to improve market health across the top price thresholds, as confidence returns following a year of pandemic uncertainty.

“Of course, the introduction of a further two per cent stamp duty penalty for foreign buyers won’t do much to help this returning health, with high-end homebuyers from outside of the UK [purchasing at £3m] looking at an average cost of half a million pounds owed in stamp duty alone as of April.”