18 February 2011

Buyers at the top end of the market have been largely immune to the mortgage restrictions and sharp price lurches of recent years – but that is set to change thanks to an imminent hike in stamp duty for homes over £1 million.

Currently, any home selling above £500,000 attracts four per cent stamp duty, so a home costing £1.1 million obliges buyers to pay a hefty £44,000 duty to the Government.

From April 6, homes over £1 million will attract five per cent duty – so that a £1.1 million property requires £55,000 duty.

It will hit more expensive homes even harder – for example, buying a £2.5 million estate today involves forking out £100,000 on stamp duty; this soars to £125,000 from April.

The obvious pressure on buyers paying above £1 million is to complete the purchase by April 5. “Place yourself in the strongest financial position. You should be a cash buyer or have a mortgage agreed in principle. If your purchase is subject to the sale of a property, ensure your buyer is in a full cash position and ready to complete,” advises Charles Birtles of CB Property Search, a Hampshire buying agency.