George Osbourne’s 2013 Budget was, as always, eagerly anticipated. And, for many, the changes in stamp duty will have a big impact.
When moving house stamp duty is one of those crippling factors. It is something that has caused a great deal of conflict over the years as the Government has given stamp duty holidays, changed the stamp duty bracket and increased fees.
The 2013 Budget has meant that stamp duty has increased. Penalising those whose homes are of more value, and who want to move to the next rung on the property ladder. In the past it has meant that many have stayed put and felt financially backed into a corner. For a while many estate agents saw a lull in property buyers, often due to moving costs. There is now a 5% stamp duty tax on homes of £1m, 7% on those at £2m and 15% for those that are bought through companies.
If you look at the average house price of a home in London you can expect to pay over £370,000. This comes with a 3% stamp duty. It is now a case that mortgages and even deposits are easier to secure than the financial difficulties that come with the prospect of actually moving.
Stamp duty was recently described by the Institute for Fiscal Studies as “Exceptionally damaging” and stated that an increase would cause significant issues. In a time when the property market has undergone such huge changes and dents it would seem that increasing the stamp duty could do far more harm than good.
By increasing the stamp duty it means that buyers have less money with which to purchase a home which will inevitably push the prices of property down. The losses incurred here are passed onto the current home owner despite the fact that it is the buyer who pays the stamp duty tax.
As you can see, the changes to the stamp duty tax has a significant affect overall on the housing market. In terms of the housing market, it is certainly a time to ‘watch this space’. With the Christmas and winter period now behind us it will be interesting to see if the next few months alters and whether the changes in the stamp duty will affect prospective buyers.
With all this in mind, if you are thinking of moving, or buying your first/next property, why not start the search here.