Taylor Scott International News
Stamp duty revenues in England and Wales raised on residential properties are projected to have risen by over 20% in 2014/2015 to a record £8 billion, according to new research. Three quarters of all home buyers are liable to pay stamp duty, ranging from nearly all sales in London to around half in northern England and Wales, says the study from the Halifax. London’s share of all revenue raised in the UK increased from 28% in 2006/2007 to 42% in 2013/2014 and two thirds of all first time buyer purchases in London are above £250,000 compared with only 1% to 2% in many regions. The research also suggests that there is no evidence so far of a dampening in activity at the very top end of the market following the recent reform of stamp duty. The Halifax estimates that the increase in revenues from stamp duty on residential sales from £6.45 billion in 2013/2014 to a record £8 billion comfortably exceeds the previous high of £6.68 billion at the peak of the last housing market boom in 2007/2008. This is more than a 15 times as much as the £520 million raised by residential stamp duty 20 years ago’ in 1994/1995. Under the new progressive structure of stamp duty introduced at the beginning of December 2014, no tax is paid on any of the value of a property below the starting threshold of £125,000. Above the first threshold, tax is charged at the relevant rate on the amount by which the selling price exceeds the threshold. This is continued through the various thresholds to the top rate. Based on the current average house price in England and Wales of£259,708, a typical home buyer pays a total of £2,985 in stamp duty. Under the old flat structure, a buyer paying this price would have been subject to stamp duty payments of £7,791, a saving of £4,806. In all regions, buyers are often making large savings. In cash terms the largest savings are in London at £4,830 and the South East at £3,843. The ‘tipping point’ price is £938,000, at which point the buyer is worse off under the new structure. The Halifax says that while it remains very early days, so far there are no signs of any marked changes in behaviour as a result of the changes made to stamp duty at the start of December. Indeed, the proportions of all sales in each of the bandings in December 2014 and January 2015 are almost identical to those in the preceding three months of September to November 2014. This equally applies at the top end of the market where the proportion of sales in London above £925,000 is unchanged at 9%, suggesting that the increase in stamp duty on such sales is not significantly deterring purchases in this market segment. Taylor Scott International
Taylor Scott International, Taylor Scott
