Well, ‘the weather outside is frightful’, which means it must be time for the Autumn statement to be released for 2014!
So, what’s worth reading out of the mass of facts, figures and promises?! Well the main one that I think could alter the playing field quite a bit would be the change in the stamp duty rate for property sales.
The rates used to be a percentage cost based on a range of values, so if you were selling a house at a price of between £125,001 – £250,000, then you would have to pay 1% for the privilege, so in this case ranging from £1250 up to £2500. However if you decided you wanted another £10 as it might help to keep the removals men fed on the moving day, then you would jump in value to 3% being chargeable (£7500.30, based on £250,010). So was the £10 ‘saving’ worth the heartache……..well no, it’s cost you £5000 (plus 30p for your beloved £10).
This has now been altered as of today (4th December 2014) to create a system similar to that of income tax in the UK.
………….I still don’t get it?!
The first £125,000 is charged as 0 (as in the previous system), but 2% will be chargeable once over this amount until you hit £250,000 at which point the rate rises to 5% from £250,000 up until the £925,000 mark. To complete the figures, there is a steep rise to 10% between £925,000 and £1.5m and then 12% once you’re above £1.5m.
Hopefully it will stop people being locked into their houses just through the property value, which caused people to try and get around the system by paying their purchasers stamp duty to ensure that they could achieve the desired price for the property. This created large voids in the marketplace meaning that there was typically nothing for £20k above the next respective bracket as this would cause the buyers to be stung by a hefty amount, so it would put off potential sales.
Will it make a difference to most people, yes I think it will, slightly harder to calculate on the spot true, but hopefully it gives a more staged approach and doesn’t harm those who have been told that the value of their property is just over one of these brackets. Personally it would have helped me about 3-4 months ago when we moved, so I’m glad that it takes immediate effect and isn’t something people are waiting to happen.
As usual with the property market, only time will tell, but I suspect that there will be a lot less properties for sale at £249,995 in the coming months!