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Stamp Duty Rates

Stamp duty rates.......

The vast majority of homebuyers will probably be feeling quite kindly towards George Osbourne after he restructured Stamp Duty and effectively gave a windfall to most homebuyers in his Autumn Statement.

Previously the stamp duty rate to the full property value which was simple at least, but meant severe tax increases at the thresholds and many felt it to be very unfair.

For example a property valued £250,000 incurred a stamp duty charge of 1%, meaning £2,500. But just a £1 increase in price took it into the higher 3% tax band which, applied to the full property value, added a massive £5,000 to the stamp duty bill.

Whilst may look a little absurd (surely you´d negotiate down a pound!) the jump from £250,000 to, say, £260,000 is less easily overcome with a tax bill somewhere between punitive and prohibitive.

The new rules take a more progressive approach in charging:

– No tax on the first £125,000 paid, then

– 2% on the element between £125,000 and £250,000

– 5% on the part from £250,000 to £925,000

– 10% on the portion up to £1.5 million

– 12% on anything higher

The new bandings mean the vast majority of buyers will be better off: for example cutting the tax bill on a £300,000 property by a huge £4,000.

On the other hand, those buying properties valued over £1m or so will end up paying significantly more and the higher the value, the harder the hit. Under the old regime a £2.5m home would have had an already hefty tax bill of £175,000. Today the bill is almost £40,000 higher at £213,750.

But according to the Chancellor only around 2% of buyers will be worse off, so if the new rules make buying easier and more affordable in 98% of cases that is surely a good thing.

Importantly, anyone who´s already exchanged contracts but hasn´t yet completed can choose which stamp duty regime to follow so buyers already in the process shouldn´t lose out.

To look into your mortgage options for purchasing a new property, whether that´s for residential or investment purposes; our Independent fee-free mortgage advice service will help advise you on the best lending product and guide you all the way through to securing your ideal mortgage.

Please call Andrew Grant´s Mortgage Service on:

From a Landline:   0800 923 2043

From a Mobile:   0330 303 1118


The Andrew Grant Mortgage Service is provided by London & Country Mortgages Ltd. Beazer House, Lower Bristol Road, Bath, BA2 3BA who are authorised and regulated by the Financial Conduct Authority. Their FCA number is 143002. The FCA does not regulate most buy to let mortgage.. Calls may be recorded for monitoring and/or training purposes

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