Move Before Christmas To Avoid Stamp Duty
If you are thinking of buying and are in a position to move before Christmas, call us today. We can help you take advantage of the stamp duty relief before it is reinstated – and get you in your new home in time for the holidays.
Stamp Duty Land Tax
On the 3rd September 2008 the Stamp Duty threshold was increased from £125,000 to the purchase price level of £175,000. This was one of the measures the government took in an attempt to kick-start a failing housing market and the economy.
The move whilst radical was not unprecedented. During the recession of the early 1990’s, the government of the day adopted a similar strategy, suspending Stamp Duty Land Tax (SDLT) on house sales up to the value of £250,000. It was to this that many politicians pointed, saying that the new threshold of £175,000 was simply not high enough.
Phrases like ‘too little too late’ and ‘using sticking plaster after sticking plaster’ were being bandied about as the government was criticised for not doing enough to help the first time buyer and the housing market. The average cost of a home in England at the time was £165,000 so it was thought that too few people would benefit from the move, for it to make any real difference.
One year on we are now coming out of recession and with the benefit of hindsight, we can say that the increase in the Stamp Duty threshold by £50,000 made little or no difference. The country still fell into recession, people still lost their jobs and did not move house unless they had to.
In one vivid and almost macabre description, an estate agent is quoted as saying “this has become a 3D market, Death, Divorce and Debt are the only reasons to sell your home now.“
Thankfully all that has changed. Properties are now sellin well providing they are competitively priced.
As we approach the end of this year-long Stamp Duty holiday, we expect that this increase in sales levels will continue. We also expect an unseasonably high turnover of property prior to the reinstatement of Stamp Duty, where buyers aim to take advantage of the current discount, which amounts to up to £1750 on a house bought for £175,000.
At present the Stamp Duty payment parameters are as follows;
Up to a sale value of £175,000 you pay no Stamp Duty
For sale values of between £175,000 and £250,000 you pay 1% Stamp Duty
For sale values of between £250,000 and £500,000 you pay 3% Stamp Duty
For sale values of £500,000 and above, you pay 4% Stamp Duty
These rates are set to continue through until the end of the year when they are due to revert to the former levels.
NAEA president, Gary Smith, comments: “NAEA figures show that the housing market is well into the first phase of recovery, but more needs to be done before we can enter the second phase.”
If you are thinking of buying and are in a position to move before Christmas, call us today. We can help you take advantage of the stamp duty relief before it is reinstated – and get you in your new home in time for the holidays.
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