Stamp Duty Savings for Buyers

The Chancellor abolished the old system from midnight on the 3rd December 2014. The Chancellor has abandoned the old system where stamp duty levels were stepped at different thresholds in favour of a system much like income tax where stamp duty will be paid at different rates on proportions of the property price.

For a typical house sale in the Canterbury area, this will have savings for the buyer. A purchaser of a flat for £150,000 will save £1,000 in stamp duty. A buyer of a house for £260,000 will save £4,800 and a buyer of a larger house for £650,000 will save £6,000. It will only be when a property considerably exceeds £1,000,000 in price that the buyer will pay more in stamp duty than under the old system.

Because of the immediate impact of the changes, the Chancellor also announced transitional provisions. For those currently in the process of buying or selling a house that has exchanged contracts but not completed by the 3rd December, the Chancellor confirmed that the buyer would be able to choose whether to pay under the old or the new system so that no-one in the middle of moving house will lose out.

Response from Estate Agents has been favourable. The property industry has long held concerns that the old punitive system of stamp duty land tax disproportionately affected home buyers and sellers in the South East. By introducing the progressive tax banding system it is considered there will be more winners than losers.

Tim Townsend