With the recent announcement from Chancellor, George Osborne, that stamp duty tax rates are to be changed, we thought we would give you a insight into what this now means for house buyers and how it can help you purchase your brand new home.
What is stamp duty?
Stamp Duty is a tax that everyone in the UK has to pay when purchasing a property. This is charged on any property you buy e.g. flat or house. The rate you pay depends on the price of the property.
Stamp duty was previously charged, as a single percentage of the entire property price, with fees increasing at the threshold of the rate bands. This meant there was a £5000 tax difference between a property priced at £250,000 and one which sold for just £1 more. Sounds ridiculous right? Well, you’re in luck as this is no longer the case.
The new rates are as follows: (Percentage of portion of property price)
0% up to £125,000
2% up to £250,000
5% up to £925,000
10% up to £1.5m
From now on anyone purchasing a property above £125,000 will only pay the rate at which the proportion of the price fits in. So for a house costing £295,000 you will pay nothing on the first £125,000, 2% on the next £125,000 and 5% on the remaining £45,000.
What does this mean for Peter Ward Home buyers? An average Peter Ward property sells at £175,000 costing the buyer an additional £1750 tax fee. With the new rules in place, only £50,000 of the overall price will be taxed, saving the buyer £750. What this means is you can now buy a property without the extra worry of raising high additional fees and with the help of Government-backed schemes such as Help to Buy, buyers have more help now than ever before.