UK buyers save from £400 to £4,800 in stamp duty fees – how have buyers in your area benefited?

publication date: Feb 29, 2016
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author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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UK buyers save from £400 to £4,800 in stamp duty fees – how have buyers in your area benefited? 

After decades of the industry asking successive governments to change the stamp duty land tax system, they finally agreed to do so in December 2014, albeit with very little warning to the industry who they had to jump through many hoops late at night to implement the changes!

So the question is, a year on, has reducing the stamp duty system worked for buyers? 
According to the chancellor, George Osborne, almost 800,000 house buyers have saved more than £650,000 on Stamp Duty Land Tax (SDLT) in the year since reforms have been introduced.

At the upper most end of the market the amount of transactions remained the same after the reforms came into force. This is despite stamp duty receipts for homes above £1,000,000 rising by 15% over the year.

Westminster now claim that this move has reduced stamp duty for 98% of those to whom it applies.

Recently HMRC have released data illustrating the benefits of SDLT reforms being felt around the United Kingdom with buyers saving a ball park figure of:-

  • £24 million in the North East or £900 for the average house

  • £90 million in the North West or £700 for the average house

  • £74 million in the East Midlands or £500 for the average house

  • £131 million the South West or £4,800 for the average house

  • £38 million in Wales or £800 for the average house

Mr Osborne stated
'In 2014 I cut stamp duty and already three-quarters of a million home-buyers across the country have benefitted. The overwhelming number of home-buyers – 98% – are saving money thanks to our reform, which has done away with the unfair old system that meant increases being imposed on those paying just a pound over the threshold.

These figures show that the benefits are being felt across the country. It’s a fair, workable, lasting reform to the taxation of housing

I am determined that this Government will continue to take bold action to support a home-owning democracy.'

Under the previous system buyers were required to pay stamp duty at a single rate on the full price of the property. Now all that is needed is to pay the rate of tax on the portion of the property in each tax band.

As this news comes out the IMF, as part of it's yearly Article IV consultation with the UK, reported that Osborne's SDLT reform has “reduced distortions and is a step in the right direction.” 

Regional breakdown of average savings – comparing pre and post reform SDLT:

Region

Price of an average house (£ ONS estimate Dec 2015)

Change in SDLT liabilities for an average house (£)

Total Estimated change in SDLT liabilities (£)

North East

£155,000

-£900

-£24,000,000

North West

£182,000

-£700

-£90,000,000

Yorks & Humberside

£183,000

-£700

-£58,000,000

East Midlands

£198,000

-£500

-£74,000,000

West Midlands

£207,000

-£400

-£83,000,000

East of England

£315,000

-£3,700

-£161,000,000

London

£536,000

-£4,600

£264,000,000.00

South East

£365,000

-£2,700

-£234,000,000

South West

£261,000

-£4,800

-£131,000,000

Wales

£175,000

-£800

-£38,000,000

Northern Ireland

£148,000

-£1,000

-£10,000,000

Scotland

£193,000

——

-£18,000,000

UK

£288,000

-£4,200

-£657,000,000

No wonder a year on the Chancellor introduced a new tax on second homes with an additional 3% stamp duty charge over and above the current system as clearly he is pretty out of pocket and the lowering of stamp duty although good for most buyers isn’t too helpful in reducing the budget deficit!  


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