The wealthy seaside idyll facing a tidal wave of taxes

Yahoo

4 days ago

Along the coastal roads in Sandbanks, luxury homes with carefully curated gardens line the streets.
The sound of saws and hammers is almost constant as wealthy residents carry out lavish refurbishments, with some going as far as knocking down seafront houses to rebuild them all over again.
However, this could all be about to change as Rachel Reeves considers raising taxes to fix Britain's strained public finances, with those with the broadest shoulders likely to bear the brunt.
According to Adrian and Robert Dunford, who run the high-end local estate agency Tailor Made, residents of Britain's most sought-after postcode are already fearful.
'Most of our wealthy clients are older, and all of them can remember a Labour government,' says Adrian.
'Not the Blair government, but a true Labour government. The reality is that there is an expectation that the wealthy do tend to be focused on.'
Nestled on a peninsula between Poole and Bournemouth along the south coast of England, with its golden sand beach, Sandbanks has long seemed the perfect place to retire.
But for how long is another matter as a looming wealth tax threatens to trigger a fresh exodus of the rich from Britain, following on from the Government's non-dom tax raid earlier this year.
'It's a bit of a split market,' says Adrian.
'When I speak to wealthy individuals, some are just leaving the country and are fairly negative with regards to what is going on in the UK. Whereas others say they are happy to pay their tax and remain here.'
'We want to at least get back what we paid'
The affluent neighbourhood, nicknamed Britain's Palm Springs, has long had the reputation of being a millionaire's playground, counting the likes of former footballer manager Harry Redknapp and chef Rick Stein among its residents.
Lynn Conway is another, having moved to the area four years ago with her husband.
However, she is now prepared to sell her £1.5m property in Sandbanks once the housing market picks up.
Average property prices in Sandbanks have fallen 3pc to £1.3m in the past 12 months, according to Rightmove, as prospective buyers weigh up the impact of stamp duty charges and rising council tax levies on second homes.
'At the moment, we don't want to put anything on because we want to at least get back what we paid,' she says.
'If we sell ours and make £100,000 on it, it's going to cost us that to move with the extra stamp duty. So we're going to stay put for the time being.'
It comes as Reeves is largely expected to raise taxes in the autumn to meet a budget shortfall potentially worth up to £20bn.
Conway says it would be a 'real worry' if the Chancellor were to implement further tax increases.
'My husband retired in 2019, but we had Covid and the market all changed, so he's having to carry on working just to cover the mortgage here,' she says.
Even in this wealthy corner of England, surrounded by multimillion-pound homes, the tax burden is still a concern.
Lola May Massingham, the owner of luxury estate agent Prime Coastal Properties, says there are fewer wealthy buyers from London, Surrey and overseas because higher taxes and increased stamp duty rates are 'deterring investment'.
'It's not incentivising somebody that's worked their whole life to have a second home,' she says.
'I'm talking about business people who watch what the economy is doing, so they're going to be nervous.'
About half of Massingham's buyers are looking for second homes in Sandbanks and the surrounding area, with many of Bournemouth FC's footballers interested in renting or buying in secluded neighbourhoods nearby.
But as wealthy Britons consider whether to pack up and move overseas, Massingham says that the Reeves's decision to tighten non-dom rules risks pushing people abroad.
'We've seen people leave already'
This is a particular threat as countries overseas seek to attract rich homeowners with lower taxes.
For example, one of her clients who owns a manor in Hampshire is already exploring a move to Spain.
Alongside non-dom changes and wealth tax fears, complaints have also been made regarding changes by the local council.
From April 1, local authorities in England were given the power to charge a double tax premium on second homes under laws passed by the previous Conservative government.
The Liberal Democrat-run council for Bournemouth, Christchurch and Poole brought the change into force, increasing the levy for properties in the most costly band from £4,509.88 to £9,019.76.
'I have been really hit by the increase in council tax,' says Jayne Kearney. 'It's now double, which makes it much more expensive owning a second home.
'I love this area and I've loved it since I was a child. It's kind of the price you pay for owning a second home.'
The end to the stamp duty holiday in April is also a sore point.
Kevin Webb, a resident of nearby Canford Cliffs, warned that high levels of the tax were scaring off prospective buyers.
'It's a ridiculous level you have to pay in stamp duty, absolutely ridiculous,' he says.
Back at Tailor Made estate agents, glossy photos of multimillion-pound homes on the market across Sandbanks glisten in the office windows. Yet for some, the appeal of staying in the UK has lost its shine.
'We've seen people leave already,' says Adrian. 'Or just base themselves outside of the UK and come back to do their 90 days.'
If this trend is anything to go by, more taxes in autumn will make the Sandbanks exodus a whole lot worse.
Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.