27 Aug Boris Johnson and the Stamp Duty Land Tax
No, it’s not the latest novel in the Harry Potter series. One of the most debilitating expenses of buying a property is Stamp Duty; it has the worst reputation and we’re not even sure anyone truly knows where the tax ends up or what it contributes to. It’s a hugely unpopular tax and we are always interested to hear about the Government’s plan for the Stamp Duty Land Tax (SDLT) as it impacts on our clients property options so heavily.
As the leading independent estate agent in Colnbrook and the surrounding areas of Windsor and Slough, we have a huge variety of properties on the market at any one time; from first-time buyer flats to family homes. Our clients have different circumstances and budgets, and the SDLT has a big impact on their buying power.
The New Prime Minister
So, when Boris Johnson became the new PM and started speaking about his plans for an emergency budget, we listened closely for news of a SDLT cut or at least some sort of reform, and we weren’t disappointed. While the new PM might not be hugely popular and we should take this announcement with a large dose of salt, a cut in SDLT would stimulate the property market in the UK and could benefit existing and potential homeowners.
At the moment, only properties valued under £125,000 (for existing property owners) or under £300,000 (for first-time buyers) are immune from SDLT. Boris Johnson has pledged to scrap Stamp Duty on all properties valued at under £500,000 in a big overhaul of the SDLT thresholds.
Since the last Stamp Duty reform in 2017, much research has been done to gauge the impact the new thresholds have had on market activity. Much of this research has been disfigured by a general hesitance in the market due to Brexit; but any research tended to focus on the impact a complete cut would have on the economy as a whole. Ludgrove Property, in London, has compiled their own research to provide a more accurate assessment of what a cut could mean for total tax revenue.
Ludgrove’s analysis suggested that just a 35% reduction in all SDLT rates could generate an incredible 40% increase per year in England alone. In turn, this could result in an extra £9.8 billion in tax and business revenue for the UK economy. While we would see smaller individual SDLT receipts the volume would increase to balance any shortfall.
There have been some rumours however, that the SDLT could simply be redirected to the seller of the property which would cause a different kind of issue and would certainly not stimulate the market in the way a wholesale cut would.
As an independent estate agent, we certainly support anything which will stimulate the property market. The change in SDLT thresholds in 2017 didn’t really benefit buyers in the south of England as much as it did for those up north where house prices are lower. This new proposal could be just what people who are currently priced out of moving are waiting for.
If you are looking to take your next, or even your first step on the property ladder, make sure you get in touch to see if we can help. As the leading independent estate agents in Colnbrook and the surrounding area we are local experts and always happy to talk you through your property options. You can contact us on 01753 683000 or email us. You can also follow us on Facebook, LinkedIn and Instagram.