Leading London and Surrey law firm Mackrell Turner Garrett are calling on people to think carefully about the implications of the latest stamp duty reforms on their future property purchases.
During this week’s Autumn Statement the Chancellor, George Osborne, announced an overhaul of stamp duty, which he claims will benefit 98% of people looking to buy a home.
Under the proposals stamp duty will no longer be a so-called ‘slab tax’ – a system in which stamp duty jumps when a house price surpasses a set thresholds – but shall instead become a graduated tax, in which the appropriate threshold rate applies on the value of a property up until the next threshold.
For example, under the old system, stamp duty on a purchase price of £550,000.00 at 4% would be £22,000.00. Under the new system, the stamp duty will be considerable less as you pay no stamp duty on the first 125,000,then 2% on the next 125,000, then 5% on the remaining £300,000.00. A total saving of £4,500.00. Above that people will pay 5% on the portion of a property’s value up to £925,000 and 10% on the portion of a property’s value up to £1.5m. Any properties above this will pay 12% on the remaining value after £1.5m.
Nigel Rowley, Managing at Mackrell Turner Garrett said that this new system will be fairer for the majority of people, but raised concerns about its implications for those living in London and the South East, where property prices are significantly higher.
“This new tax may have a number of financial and legal implications for those looking to move into high value homes,” he said. “This is a particular problem for those living in Central London or affluent areas of the South East, where house prices remain particularly high.”
“Anyone with concerns about their next move should contact a legal expert with experience, such as our property law department.
“They can help with any property issues, from the sale of a flat or a house to restrictive covenants or deeds of trust.”