Souvenirs of the stamp duty holiday
NOW THAT the first phase of the stamp duty holiday has ended, Hamptons is assessing the impact on the pockets of buyers across the country. Those purchasing in expensive markets, especially those in the south of England, will be hit hardest. In some cases, they will see their tax bills rise by more than £10,000.
Until June 30, the threshold for paying stamp duty was £500,000, but this has now fallen to £250,000 for sales that complete by September 30. While the initial holiday lifted 85 per cent of movers out of paying stamp duty, this figure has now fallen to 48 per cent. When the holiday comes to a close at the end of September, just 13 per cent of movers will pay no stamp duty.
The reduction in the nil rate band from £500,000 to £250,000 means the average stamp duty bill for a home mover in England will increase by £3,720 — from £3,240 for property purchases that completed before the end of June to £6,960 now.
However, this average figure, which is based on sales from the last 12 months, masks significant regional differences. London buyers will be worst affected by the tapering, with buyers in nine of the ten local authorities facing the biggest increases in stamp duty bills located in the capital.
Before June, 51 per cent of movers in London were not liable to pay any stamp duty. However, this proportion will fall to just six per cent during the three months until October.
In the City of London, where the average property price is £998,865, stamp duty bills will rise by an average of £12,209 to £46,441.
In Kensington and Chelsea, where homes cost £2,201,885 on average, tax bills are set to increase by £11,904 to £110,214.
For purchasers in South Buckinghamshire, the only non-London location in the top ten and where homes cost an average of £829,025, stamp duty bills will go up by £10,780 to £30,942.
At the other end of the scale, buyers in northern England will see the smallest increases in stamp duty bills. On a regional basis, the North East is least affected. Here, the average property price is £162,860 and a buyer will now pay an average of £1,060 in stamp duty, £850 more than if they had bought before the end of June.
Buyers in Hull, where homes cost an average of £123,100, are seeing the smallest uplift in their bill – stamp duty for them will go from an average of £74 to £184.
Buyers who had offers accepted during May and June will have already factored these changes into their negotiations, while some of those who had been expecting to complete in time but missed out may try to renegotiate. However, with the stock of property for sale still scarce, sellers will probably hold most of the cards.
But there are still savings to be had before the holiday ends. The threshold for paying stamp duty will revert to its normal level of £125,000 on October 1, so buyers can still save an average of £1,730 if they can complete a purchase
before this date. Around 55 per cent of buyers who had an offer accepted in June will complete before the deadline.
The first phase of the holiday had a huge impact on the Treasury’s pockets — Hamptons estimates buyers in
England will have paid a collective £5.1 billion in stamp duty over the 12 months to June 2021. That’s £3.6 billion less than if they had been paying normal rates.
Developments that are offering stamp duty incentives or stamp duty paid include Scholars, in Broxbourne, on the former site of the Broxbourne School. Gary Barton, managing director of Chase New Homes, is a former pupil of the school and he is involved in the creation of the new school building and sports facilities.
Meanwhile, the old site will be converted into 153 luxury three-, four- and five-bedroom homes, named after authors and poets. Prices start at £655,000. Agent is Hamptons.
In Maidenhead, Inland Homes has extended the stamp duty holiday on its Venue development — high-spec one- and two-bedroom apartments with secure parking.
Inland’s stamp duty holiday extension will provide a stamp duty saving for properties priced between £250,000 and £500,000. To qualify, sales must be legally completed by September 30.
All properties at Venue are included in Inland’s stamp duty holiday extension, with potential savings of £9,750 on a property with a value of £395,000.
Formerly housing the popular 1930s nightclub The Showboat, Venue is now home to one- and two-bedroom apartments.
With only six homes remaining, prices on the remaining properties start from £290,000, with Help to Buy available. Agent is again Hamptons.
Stamp duty threshold has now fallen to £250,000, until September 30’