Some good news for the average UK homebuyer!
Stamp duty is now a graduated cost as oppose to a fixed cost - Much the same as income tax.
Ok, excellent, but what does this mean in practice?
An “average” UK home, valued at £275,000 would have been subject to a 3% fixed charge under the old stamp duty rules, or a charge of £8,250. Now, under the new rules, that same home will face a charge of £3,750. This figure is calculated using the following rates:
- No stamp duty to on the purchase price up to £125,000;
- 2% duty on the purchase price between £125,000 and £250,000;
- 5% between £250,000 and £925,000;
- 10% between £925,000 and £1.5 million;
- and 12% over that.
Hopefully this will mean that a property which may have actually been worth, say £270,000, would have previously been valued at £249,000 to avoid crossing a stamp duty threshold. Under the new rules, we should see houses fetching true and fair values, as oppose to stamp duty driven ones.
Under new rules, the cross over point will be homes valued at £937,000 or more. After this, the new rules will adversely affect a purchaser.
Interesting or not, the measures are designed to benefit the majority and make the UK housing market a fairer place.