Is the stamp duty reform good for Sutton Coldfield homebuyers?
Fri 09 Jan 2015
After much anticipation, stamp duty was indeed the headline in George Osborne’s Autumn Statement last month. The move to a progressive system from the original “slab tax”, where a small price increase over certain thresholds would result in a sharp increase in Stamp Duty, has rightfully been well received.
Now, homebuyers pay different rates of stamp duty according to the proportion of the purchase price that falls within each particular band. It means Stamp Duty will now work in a similar way to income tax – and as Mr Osborne was quick to point out, it will save money for 98 per cent of homebuyers.
So will homebuyers in Sutton Coldfield will be better off under the new system?
In most cases yes, especially first time buyers looking at properties just above the original threshold of £125,000, or those purchasing homes between £250,000 and £400,000. In reality, only those purchasing a home above £937,000 will pay more in Stamp Duty.
Under the new system, anyone buying a two-bedroom home in Walmley for £185,000 will save £650 in Stamp Duty, while those opting for a £400,000 detached home in Boldmere will save a massive £2,000. If you’re considering for a town centre apartment or starter home for £130,000, Stamp Duty would now be just £100. Give or take a pound, the same price as your Energy Performance Certificate.
The savings are not always so great, of course. According to Rightmove, the average selling price in Sutton Coldfield last year was £252,317. At this price, buyers would inevitably negotiate down to £249,999, with additional benefits in the purchase if required, to come under the £250,000 threshold and pay £2,499 in Stamp Duty (one per cent).
With the changes taking immediate effect, a quick check of the Government’s handy new Stamp Duty calculator shows that under the new system, a purchase price of £249,999 would incur Stamp Duty of…you guessed it, £2,499. So it seems the ‘average’ Sutton Coldfield buyer is no better off.
But let’s not pick faults with what is undoubtedly positive news for the market. Stamp Duty has so often proved a barrier to moving, the tipping point at which moving house becomes unaffordable for many potential buyers. Now, with the new system in place, it becomes easier to move. I look forward to seeing the uplift it will inevitably generate in Sutton Coldfield and beyond.
Chris Green, Director