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TODAY'S OTHER NEWS

Stamp duty reforms save buyers £4,500 each

The typical home buyer approximately £4,500 better-off due to last year’s stamp duty changes.

Chancellor George Osborne reformed the “slab system” of UK stamp duty in his Autumn Statement last December and his changes have cut costs for the vast majority of buyers.

Yet they have dampened activity at the very top end of the market with a decline in sales over £1.5 million, according to new figures from Halifax.

Stamp duty revenues on residential properties remain lucrative for the Treasury, increasing to a record £7.5 billion in 2014-15. This surpasses the previous record set in 2007-08.

The typical home buyer has paid a total of £3,676 in stamp duty since 4 December 2014, based on the current average house price in England and Wales of £273,531.

Under the previous structure they would have £8,205. The reforms have therefore saved them £4,529.

The ‘tipping point’ price is £938,000, after which buyers are worse off under the new stamp duty structure.

Sales above £925,000 in the first six months of 2015 were 10% lower than in the first half of 2014.

This decline was exactly in line with the market as a whole, with total sales also down by 10%.

Sales above £1.5 million have seen a bigger impact with a 20% decline, twice the market fall.

This is in contrast to both 2013 and 2014 when the prime end of the market was significantly outperforming the rest of the market.

Craig McKinlay, mortgages director at Halifax, said: “The changes made to stamp duty a year ago have been of significant benefit to many buyers.

“Only those purchasing the most expensive homes are worse off.

“The failure to index the start point for stamp duty in line with house price inflation has dragged more buyers into the tax net. Buyers in London have been particularly badly affected."

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