Housing commentators had to wait until almost the end of the government’s Autumn Statement before George Osborne announced major reforms to stamp duty.
Before he detailed the changes to the threshold payments the Chancellor explained: “I am introducing today a system that replaces a badly designed system that has distorted our housing market for decades. Today I’m cutting stamp duty for millions of homebuyers across this country. The changes will mean that stamp duty will be cut for 98% of home buyers who pay it.”
The changes to stamp duty break down as follows:
- No stamp duty on the first £125,000 paid
- 2% on the portion between £125,001 and £250,000
- 5% on the portion between £250,001 and £925,000
- 10% on the portion between £925,001 and £1.5 million
- 12% on everything above £1.5 million
Responding to changes to stamp duty on behalf of the private housing sector, the Home Builder Federation executive chairman Stewart Baseley commented:
“HBF has long called for the abolition of the stamp duty slab system that caused distortions in the market, penalised buyers and influenced what builders could build. The slab system also did wider economic damage because it impeded labour mobility. Whilst we need to study the overall impact of the proposed changes the new system, which will benefit 98% of home buyers, is fairer and more practical and will help stimulate activity in the housing market, as well as helping to boost the production of new homes.”
The new stamp duty arrangement were introduced at a graduated rate, replacing the existing “slab system” from midnight on the 3 December.
By David Mote, Editor