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Mon 24 February 2014
The Chancellor of the Exchequer will give his budget to Parliament on the 19th March 2014. There are growing calls from those involved in the housing industry for Stamp Duty thresholds to be reviewed. Currently when you buy a property up to £125,000 there is no stamp duty to pay. From £125,001 - £250,000 the levy is 1% of the purchase price. At £250,001 to £500,000 it rises sharply to 3% of the purchase price, and from £1,000,001 it rises to 4% and at over £2,000,000 a whopping 7%!
In simple terms this means that someone buying at £250,000 would pay £2,500 stamp duty, if they purchased at £250,001 it increases to £7,500. Research amongst estate agents shows that this second threshold means that the market between £250,000 and £275,000 is almost non existent - properties either need to fall below the £250,000 threshold to be saleable or be well above it – not many people are prepared to offer a few thousand more and be obliged to pay an extra 2% tax to the government.
This week the latest figures showed that the average house price in England & Wales has increased to over £250,000 meaning that the majority of sales are over this threshold and the 3% levy applies.
Speculation is growing that the Chancellor may adjust the thresholds to boost the housing market. We are certainly seeing stronger demand and higher levels of sales than we have since 2008 but more needs to be done to maintain growth in the market. So let’s hope that along with the slow improvement in the weather we can look forward to a fairer stamp duty system!
Debbie Anderson- Property Chairman