Stamp duty move 'brought £4,500 saving'
Buyers purchasing a property in the last 12 months are typically £4,500 better off owing to the stamp duty changes of a year ago, a lender says.
Stamp duty was reformed to a more progressive system in England and Wales last December.
The changes saved tax for most buyers but dampened demand at the top end of the market, the Halifax said.
The lender said that the total tax levied in the UK rose to a record £7.5bn in 2014-15.
"The changes made to stamp duty a year ago have been of significant benefit to many buyers," said Craig McKinlay, mortgages director at the Halifax.
"Only those purchasing the most expensive homes are worse off. There is some evidence that the top end of the market has been adversely affected by the changes with sales over £1.5m falling by twice as much as the market as a whole."
Sales in the first six months of the year were 10% down on the first half of 2014, but there was a sales decline of 20% for properties selling for more than £1.5m, said the Halifax, which is part of Lloyds Banking Group.
Under the old system, stamp duty charged successively higher rates on the whole of the purchase price. For this reason it was often criticised as a "slab tax". Its structure meant there were sudden increases in stamp duty, when the price went above the next threshold.
Since December, the rates of stamp duty only apply to the amount of the purchase price that falls within the particular duty band, making it more like income tax.
The current stamp duty rates are:
- Up to £125,000 : 0%
- £125,001 to £250,000 : 2%
- £250,001 to £925,000 : 5%
- £925,001 to £1.5m : 10%
- Above £1.5m : 12%
People who buy homes worth more than £938,000 pay more in stamp duty than they would have done under the old rules.
The Halifax found that 72% of the stamp duty revenue raised was from property purchases in London, the East of England, and the South East of England.
Only 1% of properties in London were bought for less than £125,000 in 2014-15, meaning no stamp duty was levied in these cases. In contrast, 45% of homes in the North East of England were bought for amounts below the threshold for paying stamp duty in 2014-15.
Scotland has had its own system, known as Land and Buildings Transaction Tax, since April.
In his Autumn Statement, Chancellor George Osborne announced a further reform of stamp duty. A 3% surcharge on stamp duty when some buy-to-let properties and second homes are bought will be levied from April.
This means it will add £5,520 of tax to be paid when buying the average £184,000 buy-to-let property.