Property tax had a subduing effect on the UK housing market in March, figures from Nationwide show.
The Nationwide House Price Index shows a 1% decline in prices in March, taking the overall market to 0.9% lower than at the same point in 2011.
With annual growth in negative territory, property tax takes some of the blame, as the approaching expiry of the stamp duty holiday had raised activity levels in early 2012 – but long-term effects are also a concern.
“In our view, the challenging economic backdrop is likely to continue to act as a drag, with house prices moving sideways or modestly lower over the next 12 months,” says Nationwide’s chief economist Robert Gardner.
With a new top level of stamp duty for homes sold for over £2 million, it is likely that some high-value properties will also fall in value as owners try to undercut the threshold.
As such, wherever you are on the housing ladder, the property tax landscape has changed significantly – and could continue to do so over the coming year.
If you need help understanding your position in light of this, contact our Manchester accountants and we can work out any stamp duty liabilities on property you intend to buy, and capital gains tax on homes you want to sell.