Stamp duty, what does it actually mean?
Stamp duty history
Stamp duty is said to be an unpopular tax due to the house prices in previous years and how it was charged. The system was first introduced by Gordon Brown before he was in charge of the nations finances. Stamp duty was set rate; 1% above £60,000 in 1997.
Stamp duty changes
Stamp duty reforms will give the housing market an extremely needed boost which will spark up a surge in sales in the next year.
George Osborne reduced the burden of stamp duty on buyers in the mainstream house market which switches the old system to a new graduated one. Some RICS members shown that property surveyors and agents in England have belief that there will be a visible increase of up to 5% in sales over the next 12 months because people will put their homes back on the market in hope to get a higher price and a more straight forward sale.
The stamp duty reform could reverse the trend in buyer enquiries that has been visible in recent months and it will also encourage more vendors to put their properties back onto the market. There is expectations that transactions could increase by up to 5% over the next year.
The changes mean 98% of buyers will pay less which is shown in the band below;
0% up to £125,000
2% to £250,000
5% to £925,000
10% to £1.5m
12% any above.
For example if you buy a new home and it costs £125,000 or under you will pay no stamp duty. If you buy a new home and it costs between £125,000-£250,000 you will pay £1,000 stamp duty which is 2% of the property value that falls in the relevant band shown above.
When buying a new home you will need to submit a stamp duty land tax return form and pay what you owe within 30 days of completion. Even if the price of your new home is below £125,000 you must still submit a return form even though you wont need to pay any stamp duty. Your solicitors will usually deal with the stamp duty forms and other queries but you can do it yourself, either way you are responsible for making sure its paid on time if it’s not you can receive a charge of £100.
Mistoria Estate Agent’s can help with the understanding of how the stamp duty may effect you when purchasing a property, we also have a close relationship with many solicitors so we can also help with the chasing up of making sure the stamp duty land tax return form is submitted on time to avoid receiving a extra charge of £100. For further information please email us at; email@example.com or call us on; 0161 707 6106.