Super rich shopping for homes on ‘Billionaires Row’ hit by new tax laws
- Credit: Archant
It is home to Russian steel magnates, Middle East oil barons and even members of the Saudi royal family.
For years, the world’s wealthiest have flocked to The Bishops Avenue to expand their property portfolios in the mile-long “Billionaires Row”.
The road in East Finchley is estimated to have an overall value of £2billion and until last year homeowners could legally shield much of their wealth from the taxman through elaborate schemes which registered their homes to offshore companies, beyond the clutches of Her Majesty’s Revenue and Customs.
But a significant law change from the government last March to close the loophole and prevent millions of pounds escaping abroad, appears to be having the desired effect.
Since March 21, under the new government rules, any purchase of a property in the UK worth more than £2million by “non-natural persons” – an offshore company for example – has been subject to 15 per cent stamp duty, a hefty rise from four per cent previously.
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The same purchase by an individual faces just seven per cent stamp duty.
Grant Alexson, 50, who heads the Hampstead branch of exclusive estate agent Knight Frank, has noticed a considerable impact on purchases in The Bishops Avenue and surrounding areas since the changes came into force.
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He said: “I’ve not sold to one offshore company since the new rules were introduced. Up to 50 per cent of my business was with offshore companies, so the laws have had the desired effect.”
In December, the government published a draft Finance Bill which outlined further tax changes for house buyers purchasing £2million-plus homes under offshore companies.
This included an annual tax of £15,000 on “non-natural persons” owning homes worth between £2-5million and stretching to £140,000-a-year for homes worth £20million and above.
The draft bill, which provided much-needed clarification on the planned tax changes to potential house buyers, had an immediate effect on sales at Knight Frank in Hampstead.
Shortly after the publication, the branch sold a £25million home in The Bishops Avenue and a £19.8million in Hampstead Lane.
Mr Alexson, who marks 30 years of selling homes to Hampstead’s most rich and powerful this year, took the Ham&High on a tour of one of Knight Frank’s newest properties last week.
Caravilla, 26a The Bishops Avenue, is a six-bedroom mansion completed last year and currently priced at £12.5million.
This price tag puts it in the “entry level for brand new houses” on offer in The Bishops Avenue, he says.
Besides the six bedrooms and five en suite bathrooms, the house has under-floor heating throughout and a speaker system connected to each room controlled by iPads in the walls, in addition to a cinema, games room, swimming pool and steam room in the basement.
But Mr Alexson points out it is not the luxury indoor amenities that attract the world’s elite to the street.
“The Bishops Avenue offers statement homes and the reason they are statement homes is because they have the largest plots of land in the area,” he said.
“There are virtually no other streets around with two-and-a-half acre plots. It is the first place you find large, palace-like properties coming out of London and you can still get to Selfridges, out of rush hour, in 20 minutes.
“We’ve had serious interest in Caravilla, a couple of buyers are seriously considering. I would be surprised if it’s still available in the summer.”