Osborne gets tough on stamp duty George Osborne, the chancellor, has reiterated his tough stance on stamp duty tax avoidance, introducing annual charges of up to £140,000 and capital gains tax for luxury homes owned by companies. The move by the Treasury, which follows introduction in March of a 15 per cent tax on transactions of company-owned homes worth over £2m, is a blow to the UK's high-end property market, but ends months of anxiety about the extent of the levies. Mr Osborne said in March when announcing the Budget that he would root out "morally repugnant" stamp duty avoiders. The hardline approach precipitated a dramatic decline in the use of companies to buy and sell residential property - a practice that had previously been used to circumvent stamp duty. The Financial Times revealed on Monday that the number of homes being bought through so-called "corporate envelopes" had fallen 80 per cent in the nine months since the Budget. On Tuesday, the Treasury published its finance bill detailing how the annual levy on company-held homes would be calculated on the value of properties, with homes worth £2m-£5m being charged £15,000 and those valued at more than £20m being charged £140,000. The Treasury is addressing concerns about the "cliff-edge" nature of the capital gains tax charge - now only applying to gains accrued after April 2013 - by introducing tapering relief. But it is also considering extending the CGT charge to cover properties held by UK as well as offshore companies "for consistency." The Treasury had originally said it would garner £65m a year in taxes from the 15 per cent stamp duty, annual levy and capital gains tax. However, on Tuesday, it slashed the target to £30m after introducing exemptions for "genuine" property-owning companies, including landed estates, charities and farmers. The announcement marks the end of a nine month wait for UK estate agents specialising in prime property that have complained since the Budget that uncertainty about the incoming charges was deterring overseas buyers from the UK market. Stephanie McMahon, head of research at Strutt & Parker, the estate agent, said the clarity over the annual levy and capital gains tax would boost transactions in the near term. Lucian Cook, a director of residential research at Savills, the property consultant, welcomed the decision to create exemptions for legitimate corporate owners of residential property and said it would protect development and investment in the high-end housing market. "Nonetheless, we expect the additional taxes to take time to be absorbed, resulting in a period of static prices in the prime central London market over the course of 2013," he added.