While the government would see a shortfall of £23million in stamp duty revenue, Beresfords believes that the new 2% bracket could substantially increase the number of transactions as buyers are encouraged by the tax savings. The government would see further economic benefits with an increase in levels of property related business and subsequent tax revenue collection.
Paul Beresford, Managing Director, Beresfords, comments: “The cost factor of stamp duty has been underlined by the 40% rise in first time buyer transactions since the beginning of the year as this group of buyers rushed to beat the exemption deadline at the end of this month. By creating a further tier at £375,000 of 2%, the government would encourage sales within this bracket which would benefit a host of allied industries from white goods sellers to surveyors.”
The stamp duty threshold currently payable on properties worth over £125,000 is at a rate of 1% rising to 3% for properties valued over £250,000. The tax then rises at 1% increments to 4% on properties worth £500,000 and 5% on properties over £1million. By creating a new 2% threshold for properties between £250,000 and £375,000 it’s estimated that 7,628 buyers would benefit from cost savings of up to £3,750.
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