Drop in house sales puts T&R down £5m
Monday 11th May 2009, 2:29PM BST.
THE total value of property sales is £30m. down compared with this time last year, which will leave the States out of pocket.
The drop, from £146,517,461 at the end of April in 2008 to £115,164,234 at the end of last month, means that the Treasury and Resources Department could miss out on around £5m. in duty, according to minister Charles Parkinson (pictured).
‘For the Treasury, the fact that the total value of sales this year is about £30m. lower than last year means that we will collect less document duty than we expected,’ he said.
‘If the first quarter trend was maintained, document duty receipts might be some £4-5m. short of Budget, but it should be borne in mind that our total budgeted income for the year is £320m.’
However, he said it was early days yet and a loss of this magnitude could easily be covered by increases in other areas of revenue.
The number of properties sold this time last year was also higher, at 467 at the end of April 2008 to 423 at the end of April this year.
This includes glasshouses and field transactions, as well as family and inter-company sales.
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Amazing that somethign so serious as the loss of this type of revenue goes largely unnoticed by forum posters. Pedestrian crossings, the CMs costs and swine flu panic being far easier for them to comment upon.
On my own again? Well here’s one of your solutions Charles and any Deputies that are reading this. Close the ‘sale by share transfer’ loophole. You won’t do that though will you – benefits the already well off doesn’t it? Can’t have that can we?
Altogether now!! ..THE BANKS MIGHT LEAVE!!!
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Jackie – I get your point however we could all benefit from the rule if more of us set up holding companies and bought our houses using them. It’s just most of us probably can’t be bothered, or don’t know about it.
It costs a few quid but the likelihood is we could recoup that by selling the property via transfer for a higher price, using the lack of duty as a bargaining tool. Of course there is the risk that the holding company is a vehicle for all sorts of dodgy deal that you would conveniently inherit…probably why many don’t take the risk.
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Paul – quite right. the reason most people do not use the holding company route is because it would put off most buyers, thus reducing the sale price. Who wants to buy a company where your only protection against unexpected liabilities is a warranty from the bloke that sold it to you?
I guess that the lack of comments here is that this is just a product of market forces – nothing the States can do to force people to buy and sell houses at the moment. They have already removed the property sales tax.
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Paul
If everyone did it then the loophole would be closed. ;)
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