James Hamand, Head of Professional Valuations at Douglas & Gordon, has voiced his thoughts on the change.
James has worked in residential valuations for over ten years. Valuing properties worth up to £150m, he advises private individuals and institutional landlords on how to get the best possible results from their holdings and regularly gives expert evidence at tribunal hearings.
“ATED (Annual Tax on Enveloped Dwellings) was brought in with effect from 1 April 2013 and applies to UK residential properties owned by non-natural persons (i.e. by a company or other investment vehicle). However, from 1 April 2016, it will now also apply to residential properties worth between £500,000 and £1 million.
“As was the case under the old SDLT regime, we are seeing fewer properties transacting at or just above threshold values i.e. a property theoretically worth £505,000 might now sell for £499,999 as owners take the new charges into account.
“This makes taking valuation and legal advice, particularly in the London market, critical if investors are to take a long term view, maximise the value of their portfolios and mitigate future liabilities”.