What are the changes to Stamp Duty?
After hearing the Chancellors Autumn Statement it is clear that the biggest impact to our industry will be the changes in stamp duty. It has been widely publicised over the last couple of days but we want to briefly inform you of what has changed and what impact this may have on you.
Effective from Midnight on the 3rd December the new rules are as follows: “Under the new rules, no tax will be paid on the first £125,000 of a property, followed by 2% on the portion up to £250,000, 5% on the portion between £250,000 and £925,000, 10% on the next bit up to £1.5 million and 12% on everything over that.” (Source: bbc.co.uk)
As you can see this system is very similar to the way income tax works. It avoids any significant jumps in the amount you owe and will be a huge benefit to the majority of people purchasing a house.
So what does this mean for you?
Well based on an average family home of £275,000 the total stamp duty payable on the old system would be £8,250. With the new rules the amount payable is only £3,750 giving a huge saving of £4,500.
For people looking to purchase a house using the help to buy scheme the average Help to Buy home is £185,000. With the old rules the stamp duty would be £1,850 but using the new rules it is only £1,200, a saving of £650. This will help reduce the upfront costs involved in purchasing a house which can be a massive burden on first time buyers. (Figures taken from bbc.co.uk)