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When the Government announced its stamp duty changes on properties worth more than £2m in the Budget, opposition from the high net-worth mortgage market was obviously vociferous. This discontent hasn’t evaporated in the ensuing months and the revelation that the Chancellor’s sums aren’t adding up only adds to the disappointment. George Osborne stated at the time that it was hoped the adjustments to the tax on properties would raise £150m, but in the four months since that announcement, Government coffers have been swelled by just £11.8m. When you consider that sum would barely buy you a garage in some of London’s most sought-after streets, the Stamp Duty upheaval has hardly been the money spinner the Government expected.
It is this disparity between the forecast and the result that grates the most out of the whole sorry situation. It would almost act as some consolation if it could be proved that the adjustments were making a tangible difference to the economy, but the fact that buyers are forking out large levies that aren’t even touching the sides leaves a bad taste in the mouth and proves just how out of touch the Government is with the machinations of much of the financial services industry. Another consequence of the tax hike is an artificial skewing of the market around the affected price point. The sale of properties worth between £1m and £2m has risen by 26% since the Budget, helped no doubt by a huge number of properties suddenly being worth £1,999,995 when they would have retailed some way beyond that before March.
Having responsibility for the nation’s economic and financial matters is not an easy job by any means, but the latest stamp duty changes and continued ham-fisted dealings with the high net-worth sector shows the Government is on a different page to the rest of us.