Stamp duty reforms implemented in December 2014 have had a positive impact on the market, with buyers in the UK reportedly saving almost £2 billion in the last year, according to a new report published this week. The team at Experience Invest blog investigates.
New data by My Home Move – a leading provider of mover conveyancing services in the UK, shows that following the government’s decision to change the stamp duty rules buyers on average have saved £1,500 each per home purchase.
My Home Move also reported that a recent poll of estate agents showed that 87% said that last year’s stamp duty changes have had a positive impact on the market.
Stamp duty reforms
In last year’s Autumn Statement, the government announced that, in order to make the system fairer, they were cutting stamp duty for the majority of homebuyers in the UK. The reforms came into force on 4 December 2014.
Stamp duty – which applies to anyone buying a home in the UK for over £125,000, is now worked out based on the price of the property within each tax band. The HM Treasury provides the following example in their ‘Stamp duty reforms on residential property fact sheet’:
“Under the old rules if you bought a house for £185,000, you would have had to pay 1% tax on the full amount – a total of £1,850. Under the new rules, for the same property you’ll pay nothing on the first £125,000 and 2% on the remaining £60,000. This works out as £1,200, a saving of £650.” HM Treasury
Winners and losers
Doug Crawford, chief executive officer at My Home Move says “the big winners from the changes have been the first time buyers and second steppers who have really struggled from price hikes due to a lack of housing stock.”
In fact, according to the report, the changes have benefited anyone buying a house for less than £937,500.
The report follows last week’s announcement by the government that a new 3% stamp duty surcharge would apply to buy-to-let property and second home purchases from April 2016. The additional fee is designed to protect families and homebuyers from being ‘squeezed out’ of the housing market, as well as raise millions for the Treasury.
And while the reforms of last year benefit the vast majority of buyers in the UK, anyone purchasing property at the higher end of the scale – or over £1,500,000, will now have to pay 12% in stamp duty.
About Experience Invest
Experience Invest is a London-based independent property company specialising in residential investments, student property and care home investments. The company works with clients across the UK and internationally, and is regularly featured in the property news – see The Telegraph, on Yahoo Finance, and by Reuters for examples of recent articles.
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