Three cheers for the Chancellor. At last, after years of lobbying, the Chancellor announced in his Autumn Statement last Wednesday that Stamp Duty would be reformed from midnight that night.
The old system of Stamp Duty was blatantly unfair and unduly influenced the pricing of houses, especially at the lower end of the market. It will now be ‘tiered’, following a similar format to Income Tax.
This means that the cost of buying a property at £260,000 (for instance) is now not hugely different, in Stamp Duty paid, from a house priced at £250,000. This should actually help the flow of houses onto the market as, before this change, owners would hold off selling until a large enough gap to justify the extra duty had opened. Houses that should have been in the £250,000 – £270,000 and £500,000 – £530,000 brackets simply did not come to market. That should change now.
Buyers at the lower end of the market will make significant savings in duty paid, a great help at the most expensive time of their lives. The table below shows some examples of old versus new payments.
Of course, not everybody wins. Anyone buying a house at around £1,000,000 plus will pay more in duty but, at that level of purchase, it’s not a huge proportion of the price.
All we need now is for development to be made easier (within limits of course), so the required numbers of new homes can be built more quickly. One for the Budget next year maybe?