Taxation remains a barrier to property transactions, says Propertymark
In the world of real estate, buying and selling properties is a common occurrence. However, the process of property transactions is not always smooth sailing. One of the major challenges that continue to hinder the growth of the property market is taxation. According to Propertymark, a leading professional body for property experts in the UK, taxation remains a significant barrier to property transactions.
Propertymark has been at the forefront of advocating for a fair and transparent property market. The organization represents over 18,000 property professionals, including estate agents, letting agents, and auctioneers. With their extensive knowledge and experience in the industry, Propertymark has identified taxation as a major obstacle to the growth of the property market.
One of the main concerns raised by Propertymark is the high rate of Stamp Duty Land Tax (SDLT). This tax is imposed on properties purchased in England and Northern Ireland, and its rates vary depending on the value of the property. For example, a property worth £500,000 would attract a SDLT of £15,000, which is a significant amount for any buyer. This high rate of taxation has been a deterrent for many potential buyers, especially first-time buyers who are already struggling to save for a deposit.
Moreover, Propertymark has also highlighted the impact of Capital Gains Tax (CGT) on property transactions. CGT is a tax imposed on the profit made from selling a property that is not the owner’s primary residence. This tax can significantly reduce the profit gained from a property sale, making it less attractive for investors. As a result, many property owners are holding onto their properties for longer periods, leading to a shortage of available properties in the market.
The issue of taxation also affects the rental market. Propertymark has raised concerns about the impact of the recent changes in tax relief for landlords. Under the new rules, landlords can no longer deduct all their mortgage interest payments from their rental income before calculating their tax liability. This has resulted in higher tax bills for landlords, making it less profitable to rent out properties. As a result, many landlords have been forced to increase their rental prices, making it more challenging for tenants to find affordable housing.
The impact of taxation on property transactions is not limited to buyers and sellers. It also affects the property professionals involved in the process. Estate agents, for example, rely on property transactions for their income. However, with the high rates of taxation, many buyers are deterred from purchasing properties, leading to a decline in business for estate agents. This, in turn, affects the overall growth of the property market.
Propertymark has been actively engaging with the government to address these concerns and promote a fairer tax system for property transactions. The organization has been advocating for a review of the SDLT rates, especially for first-time buyers. They have also been calling for a reduction in CGT rates to encourage property owners to sell their properties and increase the supply of available properties in the market.
In addition, Propertymark has been pushing for a review of the new tax relief rules for landlords. They believe that these changes have had a negative impact on the rental market and have made it more challenging for tenants to find affordable housing. Propertymark is calling for a fairer tax system that takes into account the important role played by landlords in providing housing for the growing population.
Despite these challenges, Propertymark remains optimistic about the future of the property market. The organization believes that with the right policies in place, the property market can continue to thrive and contribute to the growth of the economy. They are committed to working with the government to find solutions that will benefit all stakeholders in the property industry.
In conclusion, taxation remains a significant barrier to property transactions, according to Propertymark. The high rates of SDLT, CGT, and changes in tax relief for landlords have had a negative impact on the property market. However, Propertymark is actively engaging with the government to address these concerns and promote a fairer tax system. With their expertise and determination, Propertymark is confident that the property market can overcome these challenges and continue to grow.
