When people are buying a home, it is not simply factors such as the price, area, style and quality of the property in question that they are interested in.
This is according to an article in the Financial Times, which suggests that consumers are also keen to consider issues that will impact on their asset protection strategies and tax planning.
It claimed that people want to hear “magic phrases” such as “incurs no capital gains tax” or “no inheritance tax liabilities”.
Before the general election held earlier this year, the Conservative Party had pledged to raise the threshold at which this latter levy came into effect from its current level of £325,000 to £1 million.
However, in the process of forming a coalition deal with the Liberal Democrats, it was forced to scrap this policy and there has been no sign since of the issue reappearing on the political agenda, especially given the austerity package being produced by politicians.
Commenting on the relationship between real estate and tax, solicitor Philip Munro remarked: “With real estate, as with all investment classes, there are a number of factors that will influence investment performance … A very important element of the overall investment return will be the tax efficiency of the investment and the transactional costs involved.”
In the case of the UK, real estate can be a “very attractive investment market”, he went on to claim.
He added: “For non-resident investors not trading in properties, the UK is favourable because capital gains will not be taxed.” This is unusual, he pointed out.
Minimising financial burdens through effective asset protection and tax planning may be a particularly important issue for consumers at present given the tough nature of economic climate. As a general rule, people are being cautious with their money and are perhaps more inclined to think about the long-term impact of major financial decisions.