MortgagesMar 31 2015

Two thirds to benefit from stamp duty reform: Nationwide

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Two thirds to benefit from stamp duty reform: Nationwide

More than two thirds of homebuyers across the UK are likely to benefit from the new stamp duty regime, with almost a third seeing no change and just 2 per cent likely to pay more, according to Nationwide Building Society.

Based on 2013/14 transactions data from the Land Registry, HM Revenue and Customs and the Council of Mortgage Lenders, and assuming an average saving of circa £1,580 across a total of 647,000 transactions benefiting from the changes, homebuyers in the UK could save £1bn as a result of the stamp duty changes, Nationwide found.

In last year’s Autumn Statement, the chancellor announced changes to the stamp duty slab. Now, no tax is payable for houses worth less than £125,000, 2 per cent on the portion of any value above this and up to £250,000, 5 per cent on the next portion up to £925,000, 10 per cent up to £1.5m, and 12 per cent thereafter.

Under the new rules, for the same £185,000 property you’ll pay nothing on the first £125,000 and 2 per cent on the remaining £60,000. This works out as £1,200, a saving of £650.

For homebuyers in England, Wales and Northern Ireland, the new stamp duty system came into force on 4 December 2014, while for Scottish buyers, the Land and Buildings Transaction Tax changes are to be implemented from tomorrow (1 April).

Nationwide said, as a result, the average tax payable on the purchase of a home is likely to fall across the UK, with the average saving for England projected to be £1,603, with a mean saving of £1,622 in Scotland, £1,219 in Wales and £748 in Northern Ireland.

Graham Beale, Nationwide’s chief executive, commented that buyers across the UK will now only pay for the amount of their property value over each new threshold, which he called “another encouraging step for all those considering a move on to or further up the housing ladder”.

He explained that for both England and Scotland, most likely to benefit from the changes are those looking to move up the housing ladder – though duty payable on properties over £330,000 will now be more expensive in Scotland than in England.

peter.walker@ft.com