Stamp Duty Reforms Impacting the Property Market

As you may know, the stamp duty thresholds were changed shortly before Christmas and we are now starting to see a real impact from the reforms. 

We think the changes make stamp duty a fairer system by removing the sudden spikes at each threshold. 

Before the changes in December 2014, stamp duty used to jump from 1% at £125,000 to 3% at £250,000 on the total price of the house. So if you bought a house for £255,000 you would have to pay stamp duty at 3% of the whole £255,000 rather than the £5,000 which was technically over the threshold. 

And that’s the big change - under the new system you only have to pay the higher rate of stamp duty on the proportion that is over the threshold. 

It means that house prices can now be set depending on the market rather than being skewed by the stamp duty bands - it used to be impossible to sell a house for £255,000 because the amount of stamp duty would put buyers off. 

Now that we are into 2015, we are really starting to see the new system making a difference. 

Here’s a great example - we are currently marketing a four-bedroom detached family home in Priorslee which has an asking price of £289,950. 

Under the old system, buyers would have been faced with a stamp duty charge of £8,698.50. But now the stamp duty is £4,497 - that’s almost half, and is a perfect example of why the new system is much more appealing for buyers.