Cost of buying a property falls by thousands for 98% of purchasers
Almost every single property on the Jones Robinson website is now cheaper to buy thanks to the new stamp duty reforms. The Chancellor George Osborne used his Autumn Statement to announce vote-winning measures that slashes the stamp duty bill for millions of home buyers across the country. In many cases, the buyer of an average home priced at £275,000 will immediately save £4,500 – with the new rules taking effect from midnight on 3rd December. Even purchasers who exchanged contracts before 4th December but have yet to complete will benefit from the lower levels of tax, so contact Jones Robinson today if you are buying a property through us.
The previous stamp duty brackets have been replaced by a more gradual rate of tax designed to generate more income from the most expensive properties sold. Government estimates that stamp duty will be cut for 98% of buyers eligible to pay it. In fact, everyone buying a property under £937,000 will pay less.
The new stamp duty system is based on the same model as income tax, with different tax brackets applying to portions of a property’s value, rather than the previous bands that saw steep jumps in tax if a sold price was just over the next bracket up. The first £125,000 of a property will still be stamp duty exempt but the way tax applies thereafter has changed, applying to a proportion of a property rather that working in rigid bands. Buyers will pay 2% on part of the property worth between £125,000 and £250,000, then 5% on the part of the property worth between £250,001 and £925,000. Although not quite a mansion tax, more expensive homes will be taxed at a higher rate, with a 10% tax on the portion between £925,001 and £1.5 million, and 12% applied to everything above that.
Charles Robinson, a Director at Jones Robinson, says the savings for buyers in West Berkshire run into thousands: “Those buying a property for £275,000 – which represents a large proportion of the homes we sell – will save £4,500. Those buying in the region £600,000 will also save £4,000 in stamp duty. The new system represents a much fairer approach to tax levels, with buyers not penalised should they purchase a property just one pound over a threshold, as the new system only taxes the proportion of the property that exceeds a threshold, rather than the whole sale price. West Berkshire house buyers have a fantastic early Christmas present, with instant cash savings that could be used to put down a bigger deposit, pay for legal and removal fees or even be put towards a holiday!”
If you’d like to find out how much cheaper buying a home is in light of the new stamp duty rules, please contact Jones Robinson today. The lower thresholds apply to all purchases, including those for buy-to-let purposes
Market News | 04/12/14 03:07PM