The Deputy Prime Minister has urged the Chancellor to close the commercial property stamp duty ‘loophole’, which could lead to an average increase in tax on property transactions of 2.0 to 2.5%-pts. If well signposted, that is likely to lead to a surge in transactions before the Budget in October and a crash immediately after. Beyond that, it will act to bring down commercial property capital values as some of the tax is capitalised into prices. While the overall hit to values is likely to be under 2%, it would represent an additional headwind to an already modest recovery in commercial property.
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