How the richest can still dodge the Stamp Duty hike

Great Britain, England, London, terraced houses with porticoes in West London

The introduction of a new Stamp Duty system is supposed to hit the richest who can afford to pay £1 million for a property but in reality the very wealthy are still getting away with contributing far less than their due when they buy property.

The reform of Stamp Duty, which will make house buying cheaper for 98% of purchases, wasn't the only property tax change in the autumn statement; the 'annual tax on enveloped dwellings' (ATED) was also increased by 50%.

The ATED is levied on residential properties purchased through a company, which wealthy people do in order to avoid paying Stamp Duty. The disparity between the Stamp Duty and the ATED is marked – even though the former is a one off tax and the latter is annual, you'd still have to hold a property for a very long time in order for ATED levies to catch up to Stamp Duty.

If we take the example of a £5 million property purchased in the normal way, the Stamp Duty would be now be £513,750 – up from £350,000. If the same property was purchased via a company the ATED would be £23,250 – up from £15,400. Doesn't seem like a lot for a £5 million house does it?

Even after the 50% hike in ATED, the tax would have to be paid for 22 years before the tax take equals Stamp Duty.

The loophole

I think the Stamp Duty reform is great. The old system was unfair and distorted the market around the thresholds. I can also see why chancellor George Osborne believes it is a better solution that the mansion tax because it is more workable and hits those that can afford to pay higher taxes.

What I can't work out is why the government doesn't just put an end to the Stamp Duty exemption for residential properties held in companies? With Stamp Duty hiked up for the richest, surely those buying £5 million mansions are more likely to buy a property through a company rather than through the proper channels and avoid the increase Stamp Duty altogether.

If you're buying a £5 million property the chances are you can avoid to hire a clever tax bod to work out the cheapest way for you to purchase property.

What a shame that the government has left a gaping loophole ripe for exploitation in an otherwise great reform of the way property is taxed in this country.

Most expensive property for sale at £90m is a terrace
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How the richest can still dodge the Stamp Duty hike

It may come as a surprise to hear that the world's most expensive property for sale is a terrace.

However, the luxurious property is located on one of London's most exclusive streets; Mayfair's Hill Street, which runs from Berkeley Square towards Park Lane - hence the expensive price tag. 

The £90m mansion features an impressive 21 bedrooms and 21 bathrooms. 

​The palatial house is four windows wide and covers almost 19,000 sq ft.

It also features 7 reception rooms.

The grand residence has been completely refurbished to a very high standard. 

The property has a spacious mews house to the rear and also features a garage large enough for four limousines.

It also comes with air cooling, a swimming pool, sauna and treatment room. A lot more than the average terraced property!

The elegant entertaining space is served by a new glass lift.

The iconic Hill Street is just a short walk away from Green Park and Hyde Park and is a very desirable area. 


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