The prayers of many buyers in the Darwen and Blackburn area were answered back in December 2014, in the form of the centrepiece of the Chancellors Autumn Statement; the abolishment of the Stamp Duty “slab rate”.
What is Stamp Duty?
If you who wish to buy property in the UK you must pay Stamp Duty Land Tax (SDLT) when purchasing a house, a flat or other land and buildings over a certain price.
Before the historic change, SDLT was charged at a single flat-rate for the entire price of a property and was described as one of the UK’s “most damaging” taxes ever. However in England and Wales, as of 4th December 2014 SDLT is now charged at increasing rates for each portion of the price.
What does this mean for buyers?
The slab system has been replaced by a band system, similar to how income tax works. So if you’re planning on buying property in Lancashire, you’ll now pay:
* nothing on the first £125,000 of the property price
* 2% on the next £125,000
* 5% on the next £675,000
* 10% on the next £575,000
* 12% on the rest (above £1.5 million)
So, for example: If you purchase a property for £175,000, you’ll pay £1,875 of SDLT. So if you have a property worth up to £937,500 you’ll certainly benefit from these changes.
So without the huge increases in tax once a property value enters a new “slab”, this is a much fairer system for all; where the savings are approximately £4,500 on the cost of an average home. It also supports around 98% of home-buyers, therefore encouraging more buyers to the market.
In Darwen, Blackburn and the surrounding areas at Ainsworth Lord Estates we are already experiencing a marked increase in potential buyers entering the market; which we believe (in part) is thanks to these stamp duty reforms.
What does this mean for sellers?
This move has been warmly welcomed by people looking to sell their home, as it’s inevitably increasing their chance of sale; what with the influx of optimistic buyers returning to the market.
At Ainsworth Lord Estates we believe that this is a progressive and positive step for the property industry and hope that it will also enable more regeneration opportunities right across Lancashire, as well as the rest of the UK.
2015 and 2016 are definitely the perfect time to be buying or selling, so if you’d like any further advice on SDLT reform and what it means for you then please don’t hesitate to get in touch; 01254 760660 or email: Darwen@AinsworthLordEstates.com..