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Knight Frank criticises overseas buyer stamp duty hike as profits rise

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  • 08/10/2018
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Knight Frank criticises overseas buyer stamp duty hike as profits rise
Estate agent group Knight Frank saw profits rise by 14% to £166.7m in the year to March – bucking the trend of many of its market rivals.

 

The group also saw turnover rise by 10% to £525.9m but criticised the government’s approach to property taxation and prime minister Theresa May’s plan to hit foreign buyers with a further stamp duty surcharge.

“We believe a rethink is required on purchase taxes. The multiplier effect of a vibrant homes market across all regions and all price bands is well-acknowledged, and something we need to address immediately,” Knight Frank chairman Alistair Elliott said.

Under May’s proposals, individuals and companies that are not tax resident in the UK will liable for the levy which could be as high as 3%.

However, Elliott believes another levy on top of already high levels is not the answer.

“Multiple stamp duty changes in recent years have slowed transaction volumes in some parts of the market by raising costs and creating further uncertainty,” he continued.

“This in turn has reduced market liquidity, which is now leading to a fall in the stamp duty tax take.

“Moreover, overseas investment into new-build property has forward-funded the delivery of much needed accommodation, which otherwise might not have been developed,” he added.

 

Semi-commercial expansion

Elliott also urged a government rethink on property investment and called for business rates to be examined.

Streamlining the planning process might also assist in rejuvenating high streets where retail was no longer a sustainable option, Elliott added.

“We believe there is huge potential to reintroduce more homes above shops and a strong chance this may ultimately lead to a much-needed transformation of some high streets and communities,” he said.

Knight Frank’s results were a contrast to some of its biggest competitors.

In August, Savills reported an 18% drop in year-on-year profits in the first half of 2018, while Countrywide suffered a loss of £205m in the six months to the end of June.

Countrywide has seen its share price further dented as it attempts to rescue the business and bring together a viable recovery plan.

 

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