STAMP DUTY REFORM HITS HIGH VALUE PROPERTIES
The Chancellor of the Exchequer has amended the stamp duty system with immediate effect, with buyers at the top end of the housing market paying the price for the reform.
Critics believe the property market in London could slow down drastically as homeowners are put off by the new higher rates on property transactions.
They think owners could struggle to sell their homes, or will decide to drop their asking price to avoid their homes falling within the higher thresholds, even considering SDLT mitigation to legally avoid their property tax obligations.
The biggest impact falls on houses sold for over £925,001, as they have been hit with a new 10% rate. Properties valued over £1.5m are now subject to a higher rate of 12%.
The new Stamp Duty Land Tax rates are:
- Up to £125,000 – 0%
- £125,001 to £250,000 – 2%
- £250,001 to £925,000 – 5%
- £925,001 to £1.5m – 10%
- Above £1.5m – 12%
When buying a property for £2.5 million, the new laws now mean you’d have to pay an extra £38,750 and a £10 million property would mean a tax payment of £413,750.
The new “slice” structure replaces the previous “slab” system where the tax rates were applied to the whole cost of a property. Stamp duty is still levied at different rates depending on property value but instead buyers are only charged on the amount above the relevant threshold.
The laws came into place at midnight last Wednesday, resulting in a surge of late property deals as home buyers, estate agents and solicitors across central London rushed to complete deals or face being penalised when the new system came into effect.
STAMP DUTY MITIGATION WITH FIDUCIA
If you are worried about the effect the new stamp duty legislation is having on your plans to buy or sell a property, this is where the services of Fiducia could help.
We use legally compliant and efficient SDLT strategies to help you mitigate payments, making them as manageable as possible.
To speak to our team, contact us or call today on 01625 599 200 to find out more.