Stamp duty hit for prime buyers in April
5% Stamp Duty to cost prime buyers an extra £17,000 on average
The UK’s prime house buyers will have to pay an extra £17,112 in Stamp Duty Land Tax (SDLT) when rates increase from 4% to 5% for properties over £1m in April. The increase will bring an extra £113m into the government coffers according to research by leading property website Zoopla.co.uk.
* April’s increase in SDLT will cost £1m+ buyers £17,112 extra on average
* The average SDLT paid on £1m+ properties was £68,449 in 2010
* Increased SDLT will take average duty to £85,561 from April 6th
* Total SDLT on £1m+ properties will rise to £565m from £452m in 2010
In 2010, there were 6,610 property transactions conducted in Britain at a value over £1m with an average sale price of £1.71m, resulting in an average SDLT payable of £68,449 and a total take by the government on £1m+ properties of £452m. As of April 6th the average figure for £1m+ transactions will rise to £85,561 with the government collecting £566m p.a., an extra £113m annually at the expense of the British property millionaire.
Closer analysis shows that as much as being a wealth tax, the increase in SDLT at the £1m threshold is a regional tax since 85% of the total stamp duty paid on £1m+ properties last year came from transactions in London and the South East.
Nicholas Leeming of Zoopla.co.uk, commented: “The government has identified a rich seam of revenue by raising taxes on those buying the most expensive properties in the country. However, with £1m buying little more than a 2 bedroom flat in some parts of the capital, the extra Stamp Duty will not be insignificant for families trying to move up the property ladder in and around London, where the lion’s share of the burden will fall. We may see a small tick up in transactions ahead of April with some buyers trying to beat the deadline but overall the rate change is unlikely to have a major impact on the performance of the prime market over the longer term.”
Source – Zoopla.co.uk
Stamp Duty – good news for first home buyers
Good news for people who are looking to buy their first home this week, with the government announcing that first home buyers who purchase property under £250,000 will be exempt from paying stamp duty. This is a great benefit for first home buyers and it will be a great saving which they could possibly now add to their deposit or it will simply allow more people who may not have previously been able to enter the market to purchase a home of their own.
David Smith from the Times commented that “Alistair Darling’s Robin Hood coup in last week’s budget was the two-year stamp-duty holiday for first-time buyers of homes up to £250,000, paid for by a permanent increase in the duty to 5% on £1m-plus properties. Clearly, there will be mixed feelings about this.
Despite the skepticism, stamp-duty holidays work, as previous experience has shown. Provided the bureaucracy can identify who is a genuine first-time buyer — a divorced wife or husband who was previously a joint owner will not count — this should give the market a boost, which is why the housing industry has welcomed it.”
Stephen Brown, Director of our Crouch End shop has said that “if we start seeing banks lend more then this will be a nice saving. Hopefully the stamp duty saving should be good for first home buyers as this will give more money to their deposit.”
Either way you look at it this will help more people purchase their first home which is a good thing!
