How Berkshire and Buckinghamshire will be affected by Stamp Duty changes
PUBLISHED: 16:25 12 February 2015 | UPDATED: 16:30 12 February 2015
For most there's a very welcome saving to be made, but our 'top end' buyers face an increased burden, Sue Bromley reports
Our counties have perhaps more than their ‘fair share’ of properties in the luxury sector of the property market, but many homes come with price tags where several thousand pounds can now be saved.
Antony Gibson, Residential Sales Director at Romans, says: “This reform will be warmly welcomed by the vast majority of buyers and sellers as it brings a sense of fairness to Stamp Duty and how it is calculated. The previous system created anomalies as buyers sought to negotiate around the thresholds, and whilst taxes are never popular, ones that were regarded as unfair were resented.
“The new system does offer the vast majority of buyers real cash savings – savings that can be redirected into the home they want to buy, home improvements, furnishings, or will allow them to increase their deposit enabling them to secure a more favourable mortgage rate.
“There are those buyers whose liabilities, under the new proposals will increase as the purchase price increases, but many will argue that the new system remains much fairer overall.”
Savills says the reform of Stamp Duty will mean savings for around three quarters of a million home buyers across England and Wales as all buyers up to £937,000 will benefit.
Jane Brabyn, an Associate at Savills in Sunningdale, explains: “Whilst those purchasing property valued up to £937,500 will be better off in terms of Stamp Duty paid, those purchasing property up to around £1.1 million will find they are no worse off.
“This will help motivate the professional and young family house markets and remove any discrepancy over value of property that previously has existed between stamp duty thresholds. As a result, the negotiation and purchasing process at this level of the market should become slightly easier.”
Savills in Sunningdale is currently marketing two properties by family owned developer, Kebbell Homes, within its luxurious Fircroft development on Devenish Road in Sunningdale with guide prices of £825,000 and £845,000. Lorraine Williamson, Head of Savills Residential Development Sales in Berkshire, points out: “Interested parties should now be further incentivised by the savings of between £1,550 and £1,750 that can be made on the purchase of either of these two apartments.”
By contrast, Savills estimates that around 17,000 transactions above £1.1 million will bear an increased tax burden, undermining any case for any further taxation of high value property. Daniel Burstow, Head of Savills Sunningdale Sales, adds: “Whilst this reform undermines the case for any further taxation of high value property, it is also likely to prove restrictive at the upper end of the market until any further decisions about a mansion tax are made clear by the outcome of the General Election.”
Estate agent Aston Mead has mixed reaction to Stamp Duty reforms. Managing Director Adam Hesse says: “Overall the Stamp Duty reforms make positive reading for most buyers of homes up to just short of £1m.
“Above that though, and your bill is going to increase, from what it would have been before, if you haven’t already started the process. But people buying above £2.1m are now being actively penalised, which is not good news in the South East. It equates to a one off Mansion Tax bill when you buy your house in the higher priced bracket, having to pay an extra £18,750. On balance, the reforms would appear to be a fairer system for most and some buyers are already going to see the benefits.
“We have just sold one house at £389,950 and exchanged before the new ruling. This allows our buyers to choose which SDLT rates they pay as their completion isn’t until the end of March 2015. Under the old rules they would have paid £11698.50. Under the new rules they pay £9,497.50, and save £2,201.”
A reminder of the changes
• The first £125,000 on properties is free of duty
• Then payable at 2% payable on the portion up to £250,000
• Payable at 5% on the portion up to £925,000
• Payable at 10% on the portion up to £1.5m
• Then payable at 12% on the portion over that amount
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