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.
What’s changed?
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
12% above
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.