Tuesday, 18 March 2014

"Stamp duty thresholds have saved home buyers £260m since 2012"

From City AM:

STAMP duty is helping to cool the housing market, saving buyers over £260m in the past two years, according to analysis from property website Zoopla.

Research conducted by the website demonstrates the effect of the “dead zone” for stamp duty. Since the tax rises on the price of the whole property if it edges over £125,000 or £250,000, prices are bunched just below the thresholds, saving buyers money.

The firm suggests that buyers have been able to acquire around 37,000 properties for a slightly more modest price to avoid the slab system of duty since April 2012. The duty means that if a house costs £249,999, the whole value is taxed at one per cent, whereas if it costs £250,001, it is taxed at three per cent.

Because of this effect, 25,109 more houses than expected were sold for just under £250,000 during the period, and 6,413 more than expected for just under £125,000. At the £250,000 mark, Zoopla says that the average price reduction is saving buyers £7,176.

“The current stamp duty system helps dampen price rises and helped thousands of buyers from having to overpay for their property,” said Zoopla’s Lawrence Hall.

"The actual stamp duty saving is probably as much again. What's not to like?"


Ben Jamin' said...

Perhaps the Government should introduce and easy payment scheme for SDLT. Spread over say twenty years?

ThomasBHall said...

Stamp Duty also saves buyers a whole load in the fact the don't have to borrow an additional multiple of it. If there was no SDLT, a borrower would have that much more deposit for the bank to kindly leverage up, so I'd hazard a guess that property prices would suddenly find themselves more expensive to the dame figure.

ThomasBHall said...

*more expensive to the SAME figure of the additional loan

Lola said...

Read the City AM article. I am strating to lose the will to live again...

L fairfax said...

Of course if you want to move from one property costing £x to another costing £x stamp duty makes the process a lot more.
It also discourages people from trading down when the children leave home, which is surely a bad thing?
(If you trade down from a £400k to a £300k house assuming that it costs £5k in costs etc, stamp duty will take almost 10% of the profit)

BTW I do agree with taxes on owning land but not on buying selling land.

Mark Wadsworth said...

BJ, ooh, good idea.

TBH, yes, to some extent.

L, that's why I rewrote the article in a more positive tone :-)

LF, lighten up. I re-wrote the article to reverse their emphasis. SDLT is in isolation a shit tax, but it does have a few upsides, this being one of them.