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Stamp Stamp Stamp Duty.....
I know it is not very festive but I thought I should write a short note this week on the changes in the Chancellors Autumn Statement to the Stamp Duty system.
This was the biggest shake up to the system for an awful long time and people should be aware of the changes if they are considering buying or selling because they couldn’t be much more different from the old system if they tried!
For those of you not aware, Stamp Duty is a delightful tax! It is payable by buyers when purchasing a property. Until recently, it was calculated on a tiered basis and a percentage of the total propoerty acquired was the fee... however, this has all changed!
Historically, stamp duty has made a strange 'black hole' in the property market. Because of the tiered / percentage scale, properties on the cusp of the higher rates had to pay a great deal more than those just below, which then in turn made them very difficult to sell, as people were reluctant to pay such an increased fee.
For example, with the old system a purchaser at £250,000, would have to pay 1% I.e £2,500 whereas a purchaser at £255,000, would have to pay 3% of the total I.e £7,650.... a huge difference!
The new system, so Mr Osborne reckons, will mean that 98% of house buyers will save money. Now, may be I am an old cynic when it comes to promises from politicians but we will have to wait and see.
Here is the detail of the new system.
As before there is no stamp duty to pay on purchases up to £125,000.
There is also now no stamp duty to pay on the first £125,000 of any purchases above.
The rates are now also tiered at different thresholds but you only pay the percentage on the amount between the different thresholds; 2% on the amount from £125,000 to £250,000, 5% between £250,000 and £925,000 and 10% between £925,000 and £1,500,000.
And if you are lucky enough to be able to afford above ........12% on everything above that.
Using my previous example, a £250,000 purchase would still be £2,500 but the purchase at £255,000 would now be £2,750..... a massive saving to had!
Hopefully, with these new stamp duty laws, this will pave the way for more activity in the market and especially on those properties around the previous thresholds where buyers negotiated around the stamp duty taxes.
Now, this all sounds very complicated and has taken me a week to understand fully (but then that’s just me). Usefully, those helpful people in the government and Revenue & Customs have made a handy calculator to easily work out the new stamp duty charges. So, if you are looking to sell or buy in the future visit www.hmrc.gov.uk/tools/sdlt/land-and-property.htm
Now believe it or not, I am aware that it is close to Christmas. Those of me who know me best will know how delighted I am about it...... So, next week, something a bit more festive I think.
This Article is by Rob Kahl at Scott & Stapleton
To discuss your propoerty, please call Rob on 01702 471155
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