The chancellor’s autumn statement, announced on 3 December, has provided welcome news for house buyers across the country by cutting the stamp duty payable for 98 per cent of purchasers.
George Osborne’s rethink of how stamp duty is paid came amid calls for reform from organisations such as the HomeOwners Alliance. It is expected to help more first-time buyers to get onto the property ladder and so will further boost the property market.
The much-awaited reform takes account of increasing house prices in the UK over recent years, which had trapped millions of house buyers into paying higher rates of stamp duty.
Julie Tomasik, residential property lawyer at Ansons Solicitors, explains how the new stamp duty system works:
“For residential properties stamp duty is a tax paid on property bought for £125,000 or more. Under the new system stamp duty will be charged at different rates depending on portion of the purchase price that falls into each rate band.”
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Purchase price of property
Rate of stamp duty (percentage of portion of purchase price)
£0 – £125,000
£125,001 – £250,000
£250,001 – £925,000
£925,001 – £1.5million
Over £1.5 million
By changing the way stamp duty is charged, the chancellor has reduced the stamp duty bill by £4,500 on a house worth £275,000, the average price in Britain.
However, those buying properties for more than £937,000 will face paying extra duty under the new regime.
Where contracts have been exchanged on or before 3 December 2014, and the transaction is completed on 4 December or later, you can choose whether you follow the new or the old rules.
If you are buying a home contact Julie Tomasik, head of residential conveyancing, on 01543 267 988 or email firstname.lastname@example.org for advice.
Ansons Solicitors has offices in Cannock and Lichfield, Staffordshire.