Latimer Hinks Solicitors, is advising house hunters looking for premium properties to be wary of an impending stamp duty rise.
April 6, 2011 will see a stamp duty increase from 4% to 5% on properties in excess of £1 million, with the average bill likely to rise by around £17,100.
According to property sale tracking website Zoopla, 6,610 property transactions valued in excess of £1 million were conducted in 2010, with an average sale price of £1.71 million. This led to average stamp duty fees of £68,449 and a total of £452 million from properties in this category being paid to the government.
The result is likely to mean a rush for buyers to complete deals prior to April 6, or a drop in prices after that date.
Nicola Neilson, partner and property specialist at Latimer Hinks Solicitors, said: "Based upon the 2010 figures, the average increase from a 1% rise over the £1 million mark would be £17,100. That is a big ask for any home owner, so there is clearly an incentive to buy sooner rather than later.
"The onus is also on estate agents, because they stand a better chance of achieving a sale for their customers before April 6.
"While the short term benefits could be that properties move faster as people move to beat this rise, we could see people selling at just over the £1 million mark dropping their prices to below that level to make them more attractive to buyers.
"Sellers and buyers alike need to be aware that this is happening, because it could mean a difference of thousands of pounds or even between selling or not selling a home.
Latimer Hinks Solicitors property team provides expert legal advice to buyers and sellers, and can be contacted in 01325 341500.