How many years have people in the property sector been talking about how unfair the Stamp Duty Land Tax system is? How often were petitions made to the various Governments bemoaning the fact that a £1 increase in the price paid for a property resulted in a £5,000 rise in tax?
And then came the 2014 Autumn Statement, George Osborne’s last before a General Election, and what happens? It’s all change. Call me a cynic, but I think the May date may have had some influence on the sudden change in policy!
So, what was the change? Just a complete overhaul of stamp duty land tax for residential properties! Gone is the long hated “slab” system and instead it is replaced with a progressive system from midnight on 3 December 2014.
The new table is:
Over £1.5m 12%
A comparison to the current regime shows that only homes purchased for more than £937,000 will be worse off, which represents approximately 2% of homes. It is predicted to cost the Exchequer some £650m each year.
Those who have exchanged contracts before the new regime comes into force will be able to choose which regime to pay tax under, meaning some 98% will probably choose the new! I am sure many will hope that this will be a boost to the property market, particularly for first time buyers.
But that wasn’t the end of the good news on property. The double small business rates relief is to be extended for another year, helping over 800,000 businesses.
The annual tax charges on corporates holding residential property are to be increased by 50% above the rate of inflation, in a further encouragement not to “envelope” residential properties.
Such was Mr Osborne’s confidence about the measures he was introducing that he even found time for some comedy, suggesting that a certain Labour leader may be able to take on the voice over work for Wallace due to the retirement of Peter Sallis and, potentially, Mr Milliband being out of work, but as to who will be laughing come 8 May 2015, we will have to wait and see.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.