Stamp duty reforms will up cost of buying ‘typical’ Hampstead home by nearly £15k
PUBLISHED: 15:53 03 December 2014 | UPDATED: 10:56 04 December 2014
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Stamp duty reforms announced today in George Osborne’s autumn statement will offer savings to home buyers at the lower end of the market, while those purchasing north London’s more luxurious homes face a significant rate hike.
What do the changes mean?
No stamp duty will be charged up to £125,000
2 pc on the portion up to £250,000
5 pc from £250,000 up to £925,000
10 pc up to £1.5 million
12 pc on anything above that
The changes are now in effect
The changes, which will take effect from midnight tomorrow, the 4th December, mean that rates are charged only on that part of the property price that falls within each band, which Osborne says will cut stamp duty for 98 percent of home buyers.
Gary Lazarus, negotiator at Camden Bus Estate Agents said: “The changes are going to be of most benefit to those buyers buying up to the £925,000 threshold, which is where the majority of our properties fall.
“For first-time buyers who are looking for a normal flat in our area, the changes are going to be very good.”
As prices rise above the £1.5 million threshold, buyers will see significant rises in the amount of tax they are liable to pay.
The average sold price of a property in Hampstead is £1,424,482 according to Zoopla. Under the old rules, stamp duty for a property costing this much was £71,224.10. From tomorrow, the rate for the same property would be £86,198.20, an increase of £14,974.10.
Peter Brookes, associate director at Savills Hampstead, said: “I think if you look at the proliferation of property prices in Hampstead, you can’t get much at the thresholds that would give you a saving.
“That said, at £510,000, which does exist in this area, you’re saving £4,900, which is really exciting.
“It’s when you look at things in places like Bishop’s Avenue that things start to change. People looking to spend £2 million+ will need to factor in some more capital to their plans.”
However, Brookes mentions that agents at Savills have found that buyers at the upper end of the market (many of them buying around the £2.5 million mark) have not been interested in rushing through almost complete sales today in order to avoid the higher rate.