On 3rd December 2014, the Chancellor delivered his Autumn Statement to the Commons. In a rather unexpected fillip to the housing market, George Osborne has implemented reforms to how Stamp Duty Land Tax (“SDLT”) in the UK will now be charged.
Formerly, a fixed rate of tax would be applied across all properties yielding a value within a tax band. Under the new system, similar to that of income tax, SDLT will now be charged progressively on the proportion of a property’s value which falls within each tax band.
George Osborne has claimed that 98% of homebuyers will benefit from the new reforms. This will equate to a cut of £760m in 2015/16, which represents a 15% reduction in the revenue generated by SDLT based on statistics published by HMRC for the 2013/14 tax year. There are, inevitably, some losers under the new rules. Those buying properties exceeding a value of £937,500 will see their duty
A house valued at £1m will see a rise of £3,750, whereas a house fetching a value of £3m will be stung with an SDLT hike of £63,750.
The table below outlines the positive effect the reforms will have on house prices* in some of our local areas:
* Figures on average house prices provided courtesy of rightmove.co.uk
It remain to be seen what impact the reforms will have on the housing market, but the move is generally positive from a buyer’s point of view.
For more information
Please contact Chris De Luca, residential conveyancing paralegal in Bedford on 01234 270600.