New duty rise set to stamp down hard

Mark Renshaw, Director at Fidler-Taylor Chartered Surveyors and Estate Agents in Matlock DerbyshirePicture Dean Atkins

Mark Renshaw, Director at Fidler-Taylor Chartered Surveyors and Estate Agents in Matlock DerbyshirePicture Dean Atkins

0
Have your say

How will the autumn budget’s changes in stamp duty affect us? Fidler Taylor’s new director for valuation and commercial property Mark Renshaw, a chartered surveyor of over 15 years in Chesterfield and Sheffield, gives his view.

Most homeowners only ever sell their home when they want to buy another and won’t be affected by stamp duty changes. However, if you are lucky enough to be able to buy a second home then you will feel the pinch. And if you choose to invest in bricks and mortar to increase your wealth, you will feel it too.

File photo dated 13/02/12 of a man looking through an estate agent's window as house sellers are less likely to have dropped their asking prices than they were three months ago and are offering smaller discounts, a study has found. PRESS ASSOCIATION Photo. Issue date: Thursday May 10, 2012. Sellers are holding firm despite the recent withdrawal of a stamp duty concession for first-time buyers and stamp duty hikes at the top end of the market, which both prompted concerns that sellers would be forced to slash their prices, property website Zoopla found. Around 34% of properties currently for sale have been reduced in price since they were put on the market, down from 37% when a previous study was carried out in February. The typical sum knocked off the original asking price has also fallen by more than �500 over the same period, taking average reductions to �19,012 or 7.5%. See PA story MONEY Prices. Photo credit should read: Danny Lawson/PA Wire

File photo dated 13/02/12 of a man looking through an estate agent's window as house sellers are less likely to have dropped their asking prices than they were three months ago and are offering smaller discounts, a study has found. PRESS ASSOCIATION Photo. Issue date: Thursday May 10, 2012. Sellers are holding firm despite the recent withdrawal of a stamp duty concession for first-time buyers and stamp duty hikes at the top end of the market, which both prompted concerns that sellers would be forced to slash their prices, property website Zoopla found. Around 34% of properties currently for sale have been reduced in price since they were put on the market, down from 37% when a previous study was carried out in February. The typical sum knocked off the original asking price has also fallen by more than �500 over the same period, taking average reductions to �19,012 or 7.5%. See PA story MONEY Prices. Photo credit should read: Danny Lawson/PA Wire

The new higher rates of Stamp Duty Land Tax (SDLT) will apply to anyone buying additional residential properties costing more than £40,000 from April 1.

These new rates will be 3 per cent higher. Houses selling at up to £125,000 have been exempt of stamp duty, but from April 1, buyers who already own a property will have to pay a 3 per cent fee on purchases from £40,000 to £125,000.

For properties between £125,001 and £250,000 the rate for such buyers increases from the current 2 per cent to 5 per cent. And the same type of buyers purchasing properties between £250,001 and £925,000 will pay an 8 per cent charge instead of the current 5 per cent.

“Why should we suffer?” cry investors. The government says it’s because homeowners – and those not yet on the property ladder – are being squeezed out by buy-to-let landlords expanding their portfolios and the wealthy wanting extra homes.

Some £60m of the money raised will go to communities in England where the impact of second homes is acute - beautiful locations where young local people can’t buy.

I believe the rise in stamp duty will hit the very people it is supposed to help. It will discourage small landlords and a shortage will mean first-time buyers will be stuck for longer in rented accommodation while they struggle to save up a deposit.