Archive for January, 2015

Stamp Duty Changes – 2014

Tuesday, January 6th, 2015

In the Autumn Statement the Chancellor, George Osborne, announced a fundamental change in how Stamp Duty will be charged on sales of residential property.

Up until 4 December 2014, the Stamp Duty was levied on the sum total of the purchase price for residential properties above £125,000. For example, if a property sold for £250,000 the Stamp Duty charged was 1% on the whole £250,000 i.e. £2,500.

Housing surveys from Edward Jackson : Southport : Merseyside : Lancashire

Housing surveys from Edward Jackson : Southport : Merseyside : Lancashire

If a property sold for £250,001 then the whole sum was charged at 3% i.e. £7,500.03. This principle created difficulties in the property market for purchasers, in that an agreed price that was within say 5% of a Stamp Duty threshold limit would be reduced by a Valuer to the Stamp Duty threshold.

The fundamental change from 4 December 2014 is that the Stamp Duty percentage will now only be charged on the sum of money above the threshold. For example, if a property sells for £250,000 the purchaser will pay 2% Stamp Duty i.e. £5,000.

If a property sells for £275,000 the purchaser will pay 2% Stamp Duty up to £250,000 and 5% on £25,000 i.e. £6,250. Under the old rules the purchaser would have paid £8,250, so there is a substantial saving to be made under the new rules.

That’s going to have implications for the UK property market. We believe that it should stimulate the market and is likely to lead to an increase in transaction prices in the average UK property. Conversely, it could well cause a reduction in valuations of properties in the prestigious market.

The complexities such as these within the housing market are just why it makes sense to have a property professional on your side and at Edward Jackson, with over 80 Years of Valuation experience in the South West Lancashire and Merseyside areas, we’re well qualified to interpret the property market.