Brown resisted the temptation to raise the Stamp Duty property transfer tax again, after four rises since Labour came to power in 1997, but he did announce the closure of several loopholes that had allowed property investors to avoid the tax. At the same time he announced that commercial property investment in 2,000 areas of high unemployment across the UK would be exempt from Stamp Duty.
According to Chris Pieroni, Head of Research at Colliers CRE, this could lead to a revival in the investment market in places like Liverpool and the inner London boroughs.
But the RICS has criticised the Chancellor for not raising the £60,000 ($86,500) threshold at which Stamp Duty becomes payable. RICS Chief Economist, Milan Khatri, said: 'This is an important sector of the overall property market, and one where young couples and others wanting to buy a home of their own are finding it increasingly difficult to get started. Removing the cost of the stamp duty payment by raising the limit for the zero rate would have provided an immediate boost to that sector.'
But overall, the Chancellor's emphasis on economic stability--with the UK economy forecast to grow at 2.75% over the medium term--was seen as good news for property. 'Property performs best in times of economic stability,' pointed out Pieroni. But he did raise a question over the performance of retail property, given that personal taxation is to rise by 1% next year. 'The tax rise is bound to impact consumer spending,' he said.
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