29th March - Stamp Duty Update
The levels of stamp duty changed yet again when George Osborne delivered his latest budget on 21 March. The tweaks he introduced
affect first-time buyers and the very rich. The new levels are set our on our buying costs page.
First-time buyers have had their 1% freebie for properties up to £250,000 removed. Certainly for Jen and Simon (pictured) it made
an appreciable difference. They completed on their 4 bedroom house in Birmingham 10 days before the stamp duty concession was
removed. Jen commented "being a first-time buyer is daunting enough without having to worry about extra up front costs like stamp
duty. We will now be able to spend the money saved on renovation projects. We were lucky to complete in time." I call it good
judgement myself! However future first-time buyers may be put off from taking a similar leap into home ownership now that this perk
has been removed. Given that first time buyers are the lifeblood of the property market, this has already had a negative impact on
prices, which were down 1 percent in March according to Nationwide - View details.
The very rich will now have to pay 7% for houses over £2 million. That's a colossal £140,000 at that level, which is more than half
the price of the average house in England and Wales. It sounds like a lot, but £2 million doesn't get you very far in central London
these days. All it will do is drive out domestic buyers, as foreign buyers don't pay it anyway.
The Chancellor also reckons he will be cracking down on stamp duty avoidance schemes, but the proof will be in the pudding. Rich
people employ highly intelligent tax lawyers whose sole purpose in life is to find new and evermore ingenious ways of saving their
clients money, and justifying their exorbitant fees. So I'm not holding my breath on that front.
See also my previous article on stamp duty.
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