Stamp duty bills fall by £4,500

Tom Wilson
8 December 2015
Homebuyers’ stamp duty bills have fallen to a typical £4,500 thanks to the reform of stamp duty introduced in December 2014, according to figures from the Halifax.The UK’s largest mortgage lender said someone buying a property for £273,531 — the average price for a home in England and Wales — would pay £3,676 in stamp duty under the current system, compared to a bill of £8,205 under the old system.A third of first time buyers (32%) paid no stamp duty at all, as these purchases were below the £125,000 threshold at which stamp duty is now levied.However, buyers of more expensive properties are worse off under the new system. Anyone buying a house for more than £938,000 will pay more.This tax hike on high-end properties has slowed the top end of the market. Sales of properties worth £1.5 million or more have slowed by 20% over the last year, while the market as a whole has declined by 10%.Commenting, Craig McKinlay, mortgages director at Halifax, said: “The changes made to stamp duty a year ago have been of significant benefit to many buyers.“Only those purchasing the most expensive homes are worse off. There is some evidence that the top end of the market has been adversely affected by the changes with sales over £1.5 million falling by twice as much as the market as a whole.”The Treasury is also a major beneficiary of the changes, with stamp duty receipts reaching a record £7.5 billion in 2014/15. That’s potentially down to people rushing through expensive transactions under the old system, but it’s also because stamp duty thresholds have been frozen, despite prices rising 9.7% over the year to October, according to Halifax.McKinlay added: “The failure to index the start point for stamp duty in line with house price inflation has dragged more buyers into the tax net in recent years. Buyers in London have been particularly badly affected with the capital accounting for an increasing and disproportionately large share of stamp duty revenues."

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