Caution needed on stamp duty reform

The British Property Federation has urged chancellor George Osborne to “tread lightly” with a proposed super-rich stamp duty reform.

It has been reported that some super-rich foreign buyers of overseas homes avoid paying the stamp duty levy by putting expensive homes in offshore companies – a move estimated to cost the Treasury up to £1bn a year.

The Chancellor said in a recent interview that stamp duty avoidance was “something we are definitely looking very closely at now”.

BPF director of finance Peter Cosmetatos said: “Unlike high-value housing, the commercial investment market is fragile, with weak confidence and limited liquidity outside central London, and the use of holding structures is widespread for a variety of commercial reasons, especially where there is, or may be, co-investment by a number of different parties.

“In its enthusiasm to clamp down on avoidance elsewhere, the government must not forget the importance to the UK economy of rebuilding confidence and liquidity in the commercial property investment and development market.”