STAMP OF APPROVAL
The chancellor has made momentous changes to the stamp duty system. The majority of people thought the old system was iniquitous because there was no sliding scale. In simple terms once you went over the stamp duty threshold you would pay the percentage, not on the difference over that level but on the whole amount. The new graduated scheme is what the public always hoped for.
If you’re buying at £250,000 there is no difference, under the old system you would have paid 1% on the whole, so £2500. The new system is 2% on the difference over £125,000, so yes you pay the same. However a £275,000 house means you will now pay £3750, a massive £4500 saving. At £600,000 you would have paid £24,000 and will now pay £20,000. The highest levels are reserved for the exclusive market place where stamp duty increases to 10% above £925,000 and up to £1.5 million and then up to 12% above that. This means when you buy a £1.5 million home you’ll pay nearly £20,000 more and at £3 million you will have to find an extra £60,000. Finally, the lower to middle income earners who might buy at £150,000, before the changes you would have stumped up £1500 of stamp duty and now you’ll only have to find £500, a significant saving.
So expect a boost in the lower and mid-range activity of the property market and some very interesting negotiations at the higher end! Overall though a positive and popular transition for a huge number of home buyers.