Stamp duty changes save homeowners £701million
Homeowners have saved a reported £701million in the first six months since the stamp duty system was reformed late last year.The research which was carried out by myhomemove, suggested that each homebuyer who bought a home for less than £937,500 saved an average of £1,400.When the changes were originally introduced, it was predicted that 98% of homebuyers would save money on their stamp duty land tax.
Who has benefitted from the stamp duty changes?
The stamp duty changes are thought to have provided a major boost to those looking to make their first step onto the property ladder.Under the old system, small increases in house prices could lead to large jumps in the amount of stamp duty land tax owed.The old thresholds were:
- 0% up to £125,000
- 1% between £125,001 and £250,000
- 3% between £250,001 and £500,000
- 4% between £500,001 and £1,000,000
- 5% between £1,000,001 and £2,000,000
- 7% over £2,000,001
So, whilst there would be no stamp duty paid on a property purchased at £120,000, a homebuyer purchasing a property at £130,000 would be required to pay 1% stamp duty on the full purchase price.The stamp duty changes now mean that a homebuyer would only be required to pay 2% stamp duty on the amount of the purchase price that falls within that particular threshold. This reduces the stamp duty owed on a property valued at £130,000 from £1,300 under the old system to just £100 under the new system.The new thresholds are:
- 0% on the first £125,000 of the property price
- 2% on the next £125,000 (the portion from £125,001 to £250,000)
- 5% on the next £675,000 (the portion from £250,001 to £925,000
- 10% on the next £575,000 (the portion from £925,001 to £1.5million)
- 12% on the rest (above £1.5 million)
Avoiding sudden price hikes
One of the main reasons for the changes was to avoid the sudden price hikes between each threshold. Anyone purchasing a home just above one of the new stamp duty land tax thresholds will most likely benefit from significant savings.Helen Robinson, Head of Conveyancing at Farnworth Rose Solicitors in Lancashire, commented: 'Last year's stamp duty changes do appear to have saved homebuyers across the UK a significant amount of money.'Fortunately, we are now dealing with a much fairer approach to stamp duty which removes the risk of homebuyers seeing substantial increases in price as they move into a higher threshold.'We would encourage anyone who is seeking to purchase a new home to get in touch with Farnworth Rose Solicitors. Our dedicated team can offer advice on all aspects of the conveyancing process and provide an affordable, clear-cut conveyancing quote.â?
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