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)
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