Conveyancing News: Proposed Stamp Duty Reform
- Author: Dean Skinner
- Posted on: 28th February 2020
- Posted in: Blog
During his leadership campaign, Boris Johnson proposed raising the threshold of Stamp Duty Land Tax for residential properties from £125,000 to £500,000 in addition to lowering the top rate (properties over £1.5million) from 12% to 7%.
The thought behind this was that it would stimulate the lethargic housing market, with the high cost of Stamp Duty frequently cited as an added obstacle to potential buyers. The proposed Stamp Duty reform would not only benefit first-time buyers but would also help second-steppers and others who want to move but are reluctant because of the costs involved.
It was also mooted that Johnson was considering shifting the Stamp Duty liability from buyer to seller.
Current residential Stamp Duty Land Tax rates
Buyers currently pay Stamp Duty on increasing portions of the property price above £125,000 when they buy residential property, although they are liable to a discount (relief) if they’re buying a first home and the purchase price is below £500,000:
- Up to £125,000 = 0% SDLT
- £125,001 - £250,000 = 2% SDLT
- £250,001 - £925,000 = 5% SDLT
- £925,001 - £1,500,000 = 10% SDLT
- over £1,500,001 = 12% SDLT (
Could the proposed Stamp Duty cut have a negative impact?
Apart from jeopardising the significant revenues that are reaped from the current levies – Stamp Duty costs buyers £8.4billion a year – all might not be as positive as it seems. Although the changes might initially help to reboot the flagging UK housing market after an episode of uncertainty, experts warn that this might not be the case.
In an article on todaysconveyancer.co.uk, a spokesperson from one of the UK’s leading property management companies warned that the proposed Stamp Duty cuts may benefit property sales in London and the South East but could collapse ‘less over-heated’ housing markets.
What next for Stamp Duty?
With the Budget taking place next month, MPs, economists and industry experts see this as an opportunity to address Britain's flawed Stamp Duty system and help to get the housing market moving again. The new Chancellor Rishi Sunak is under increasing pressure to introduce a variety of changes – from slashing Stamp Duty to introducing exclusions for those who are downsizing – but we’ll have to wait and see what happens on 11th March.
Making conveyancing simple
Buying or selling a house can be one of the most stressful times in your life. While negotiating over prices and coordinating chains is usually unavoidable, getting lost in the legal jargon and being daunted by complex paperwork doesn’t have to be part of your experience.
Here at Crosby & Woods, we’ve created guides to the conveyancing process to help prepare you for your property sale or purchase.
Whatever happens with Stamp Duty reform, our knowledgeable and efficient conveyancing team will be on hand to take care of your transaction. Please call us on 01273 734 600 or email us at email@example.com