Stamp duty has become yet another hurdle for buyers across the country in recent years with the inflating cost of houses seeing many paying out thousands to cover the cost of the government tax on property.
However with an election fast approaching George Osborne has shaken up the stamp duty brackets in his autumn statement to benefit those buying at the lower end of the property market. It could be a last minute scramble for votes, but welcome news nonetheless for those looking to get on or move up the property ladder.
Although the reform sees an increased percentage paid on each price bracket the abolition of the slab structure means that those buying at the lower end of the market will save on the cost of stamp duty. In other words buyers will only pay the percentage levy on the proportion of the sale price at the new percentage rate.
So to put it into context before today a house purchased at £260,000 incurred a 3% tax of £7,800. But the new changes mean from today a house purchased at £260,000 will only incur a charge of £2,999. No tax for the first £125,000, £2,499 for the 2% between £125,001 to £250,000 and £500 for the 5% between £250,001 to £260,000.
For the typical buyer at an average purchase price of £260k this is worth a lot and should definitely encourage buyers to buy and therefore sellers to sell.
A recent survey of over 1000 UK home owners by Britain’s largest online estate agent eMoov.co.uk found that 29% of those surveyed were deterred from buying altogether as a result of the cost of stamp duty. Most prevalent in the nation’s capital with 40% fearing the cost, it is also little surprise that those buying a property over £500,000 (38%), one of the highest taxed brackets, would avoid buying as a result of stamp duty.
Property Expert Russell Quirk, CEO of eMoov.co.uk commented:
‘The treasury’s revenue from stamp duty has been escalating at an alarming rate. From 2010-11 it amassed £5.8billion and is forecast to reach £18billion by 2019. It’s almost as if the government have decided to get a piece of the action from traditional estate agents, implementing over the top, unjustified charges on the sale of a property for their own benefit. It’s as if George Osborne IS an estate agent in his ‘money for nothing’ approach “