Over 13% of properties worth £1m or more were bought through these structures in the 12 months prior to the March budget. However, in the following months – during which a high Stamp Duty was introduced and proposals for annual charges and an extension of capital gains tax were floated – this dropped to 2.1%.
The report said: “The combination of a new 15% SDLT entry charge, the proposed new annual charge and extension of capital gains tax have acted to create an air of uncertainty among buyers who were considering purchasing property through a company structure.
“Demand from these buyers has unsurprisingly fallen, pushing transactions lower as they waited for clarity from the publication of the draft Finance Bill regarding the structures which could be employer to maintain privacy within the new tax regime.”
The proportion of buyers using companies to purchase properties worth £10m or more plummeted the most steeply, from almost a third to 3.8%
Demand for prime London property worth between £2m and £5m in Q3 was 44% lower than at the same time in 2011. Overall, demand for property worth over £2m in Q3 was down a third on the previous year.