THE sharp fall in government revenues due to the economic recession seems to be putting pressure on the Land Registry (LR) to be much stricter in re-assessing bought property values, in order to maximise the amount of transfer tax it gathers.

In using its discretion to reassess the amount of transfer tax payable, the LR is relying on its own historical data in a way that cancels out the transfer tax benefit of a “bargain-buy”, and can result in double the expected amount being levied.

In three cases highlighted by the Sunday Mail, property-buyers have been told that, for the purposes of calculating transfer tax, the value of their properties has been set by the LR at between 36 and 58 per cent above the sale price.

The whole issue hinges on what the LR considers to be the “real market value” of a property when it decides that the declared sale price is lower than market levels. A careful definition of terms is therefore needed to understand the logic of the LR’s position.

From what I've seen there doesn't appear to be too much rhyme or reason to the prices being asked - I've seen almost identical properties with as much as 40-50,000 difference in asking prices, which makes you wonder what criteria people are using to come to their valuations?