Many people tax planning in Cheshire or Oswestry will have questions about the new so-called ‘mansion tax’ and what it means for house owners and property transactions.
This follows the Chancellor’s announcement that properties in England worth over £2 million will now be subject to a surcharge, in addition to regular council tax payments. Payments will range between £2,500 and £7,500 per year, and will rise in line with inflation.
So if you are affected, what are your options and how can you minimise your exposure? Different property experts have shared their opinions.
Paula Higgins, of the HomeOwners Alliance, stressed that housebuyers in this price range will now have a stronger negotiating hand than sellers. This is because the supply of premium priced homes entering the market will increase as sellers attempt to beat the new tax.
For those wondering if reducing the price to £1.99 million might beat the tax, this is not necessarily the case. Nigel Bishop of Recoco Property Research cautions that official government valuations may differ from market prices and that much will depend on exactly how they are assessed. It is this figure that will ultimately determine the tax threshold. Different considerations will be factored into calculations, such as the size, condition, and area location.
James Evans, of estate agent Douglas and Gordon, said that someone buying a family home should consider the bigger picture. A house as a long-term, 10-year-plus investment will gain value over time. For many, it may be too deep and personal a commitment to be swayed by a mansion tax.
