A reform of the outdated stamp duty laws last month, to be more in-line with what Scottish homeowners pay, stated: “From 1 April 2015, stamp duty in Scotland is being replaced by Land and Buildings Transaction Tax (LBTT). Until that date, the new stamp duty rates will apply in Scotland too. The new system in England and Wales will be similar to LBTT, with buyers only charged the higher rates on the portion of the property price that falls within that band.”
So what does this mean? Put simply…
“This means that “98% of homeowners in the UK now pay less when they purchase a house.” (George Osbourne in BBC News, December 3rd 2014).
In fact, only the very wealthy (owners of houses valued from 925k) will now pay more in stamp duty. Across the board, prospective buyers will pay considerably less.
The average family home costs around £275,000/£300,000.
Under the old rules the obligatory 2% tax meant that the amount you paid would be around £8,000 /£9,000.
Under the new stamp duty laws, new homeowners pay 1.4%, that’s a total saving of £4/£5k.
If you’re looking for something cheaper, say a flat that’s around £120,000 up to £125,000 you won’t have to pay anything at all.
To work out what you might pay in stamp duty for your new home, it’s handy to have this stamp duty calculator (from GOV.UK) bookmarked, so it’s available as a quick check tool.
In the past, the way that stamp duty worked meant that even if you went 1p over a tax threshold, you were automatically thrown into a higher stamp duty percentage. People looked for a house that was not a penny more than a certain price to avoid being penalised.
For homebuyers it meant that quite a few houses were off limits as the stamp duty price took them to the top end of their budget. With the new stamp duty laws, these houses can now come back into consideration, making the net wider for people looking for a new home. This is particularly useful if you’re looking in a very specific area or if the houses you’re viewing at are a bit of stretch – there’s now more choice and those larger homes are within reach. This means that if you’ve been searching for property for a while and nothing’s caught your eye, you can re-adjust your budget to take in the decrease in duty, it might give you better odds.
If you’re a first time buyer it could mean that your first ever home is more of a possibility than before, so if you’ve been saving all your money ready for the big day, you might have a little extra to spend on decorating, new furniture, or even a big housewarming party.
With all the other costs you have to consider when you move home like solicitors fees, surveys, stamp duty, etc. engaging a removals company might be the last thing on your moving house checklist.
Before the new stamp duty rules, spending a little extra on removals could have been one of those things you just didn’t have the money to do. You might have been planning to hire a van and move everything yourself, which on top of everything else can be pretty stressful (particularly if you have a young family, pets, valuables etc), take days to complete, require heavy lifting and a lot of boxes.
Now, after you take into account stamp duty changes, you might have a little extra to spend on getting the professionals in. Moving a family home can be surprisingly affordable and with our bespoke services you can choose to be as involved as you want. You can pack, wrap and leave for us to deliver, or you can just put your feet up and let us do all the work – we’ll even assemble your furniture. Whether it’s an international move or closer to home, we can handle it. And while in transit, we offer insurance to make sure that if anything happens – you’re covered.
With the new stamp duty changes and the fact that UK house prices are cooling (according to recent claims from the Office of National Statistics in The Guardian), now might be the best time to get moving, and we’ll be there to help you get through it – just contact us for a chat.