Following the governments decision to increase Stamp Duty Land Tax to 15% on property investments worth more then £2m, property experts have recently been debating whether we may see a sharp rise in property funds.

By investing in property indirectly – through the use of property funds – property investors will be able to avoid this high taxation.

However not all property experts believe this will happen…

Whilst there are certain benefits to buying this way, they feel any investor who is willing to pay more than £2m on a property in the first place is unlikely to want to own it indirectly through a trust fund but will want direct ownership.

Similarly they feel there are other more affordable ways to invest in property…

For instance whilst buying a £20m property through a family trust will have a tax of only £3m, to buy this same property in smaller units (but at the same price) will only create a tax bill of £800,000 says property investment company London Central Portfolio (LCP)

However property investors choose to approach this rise in Stamp Duties, one thing is clear - they haven’t been put off investing in property.

Every year, purchases of £2m+ property investments has risen, with 2011 seeing 5% rise and 2010 a 2% rise.

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