More than 780,000 homebuyers have saved around £657m on Stamp Duty in the year since the tax was reformed, according to Chancellor George Osborne.
He reports that transaction levels in the prime property market have remained constant under the new scheme and Stamp Duty receipts for homes costing over £1m have risen by 15% over the year.
In December 2014, Osborne revised the residential Stamp Duty system, changing it from a slab to a slice structure, reducing the amount of Stamp Duty buyers have to pay for 98% of people.
Analysis of the new system by HMRC found that the benefits of the reform have been felt across the country.
Homebuyers have saved an estimated total of:
- £24m in the North East, or £900 on the average home.
- £90m in the North West, or £700 on the average home.
- £74m in the East Midlands, of £500 on the average home.
- £131m in the South West, or £4,800 on the average home.
- £38m in Wales, or £800 on the average home.
Osborne comments: “In 2014, I cut Stamp Duty and already, three-quarters of a million homebuyers across the country have benefitted. It’s a fair, workable, lasting reform to the taxation of housing.”1
Under the revision, buyers of more expensive properties are now charged a higher rate of Stamp Duty.
The Treasury claims that while the average homebuyer in London experienced a decline in Stamp Duty costs, London purchasers as a whole paid more Stamp Duty.
The main reason for this is the relatively high volume of homes that are worth more than £1m in the capital.
Buyers in the South East saw the greatest saving, despite the region’s high average house price. However, as a large number of properties cost between £125,000-£1m, overall, buyers saved on the tax.
Other regions, such as the North East, Wales and Northern Ireland, saved less as they have fewer property transactions, and many of these buyers pay no or little Stamp Duty anyway.
The Treasury states that around 85% of residential property transactions are for people’s main residential home, according to figures from 2014-15.
Landlords are reminded that as of 1st April, buy-to-let investors and second homebuyers will be charged an extra 3% in Stamp Duty on properties worth over £40,000.
Many landlords are rushing to complete on purchases before then.