Buyers benefit from '£4,500 saving' due to stamp duty changes
07 Dec 2015
Buyers who purchased a property within the last 12 months have typically saved around £4,500 due to stamp duty changes introduced a year ago, reports mortgage lender, Halifax.
In his 2014 Autumn Statement, the Chancellor reformed the system from a ‘slab’ arrangement to a tax that is progressive. The old structure meant that, when the price of a property went over the next threshold, buyers experienced a sharp increase in stamp duty as the higher rate was applied to the value of the whole transaction.
However, the change that came into force last December means that stamp duty rates are now only applicable to the portion of the purchase price which exceeds each duty band.
Furthermore, the alteration only benefits those buyers spending £938,000 or less on a property.
The average price that people spend on a home is currently £273,531, according to data from HMRC, Halifax and the Land Registry. These buyers will, under the new stamp duty system, pay a total amount of £3,676, instead of £8,205.
Craig McKinlay, mortgages director at Halifax, stated: ‘Only those purchasing the most expensive homes are worse off. There is some evidence that the top end of the market has been adversely affected by the changes with sales over £1.5 million falling by twice as much as the market as a whole’.
Chancellor George Osborne announced an additional stamp duty reform in his 2015 Autumn Statement, which will see a 3% surcharge on stamp duty on some second homes and buy-to-let properties. This is due to come into force in April 2016.