COMMENT BY FRASER SLATER CEO OF LUDGROVE ON BORIS JOHNSON’S STAMP DUTY CHANGES
“Our in-house research has shown that changes in the top rate of Stamp Duty were directly responsible for the 26% fall in London property transactions since 2014. Depending on the size of the tax reduction, Boris Johnson’s plans to reduce Stamp Duty will go a long way to resolving the broken market in London and The South East. A significant cut will ‘un-gum’ property chains at the top-end leading to greater liquidity throughout the market, as well as a more efficient use of the existing housing stock.
Lower transaction taxes will also encourage the conversion of tired stock to modernised rental units by Investors and new housing starts by developers. Looking back at history, a top Stamp Duty rate of 4% would be the optimal level (versus 12% today). The last time the top rate was 4% London property transactions were 94% higher at 175,870 compared to 90,316 transactions in 2018.
Furthermore, we agree wholeheartedly with Mr Johnson’s sentiment that tax cuts can create more tax revenue (via the Laffer Curve effect). Our research shows that a cut in Stamp Duty will actually generate more overall tax revenue through increased transactions and property-related business activity (Stamp Duty, VAT, Corporation Tax & Employment taxes).”
For further information on Ludgrove visit www.ludgrovepoperty.com
Ludgrove is an award-winning property finder and consultant operating in Prime Central London, with an office in Berkeley Square, Mayfair. The company was established by husband and wife team Fraser and Isabella Slater, who having lived in Prime Central London for over 20 years decided to join forces to provide an exclusive buying service for clients.