The average home buyer in the UK is better off with the stamp duty changes made a year ago.
According to Halifax, stamp duty tax on an average-priced property in England and Wales has fallen by £4,500 since December last year.
Halifax said that the only people negatively affected are those purchasing the most expensive homes.
The current rates in the UK for residential house purchases are:
| Consideration | Rate (paid on portion in band) |
|---|---|
| up to £125,000 | 0% |
| from £125,001 to £250,000 | 2% |
| from £250,001 to £925,000 | 5% |
| from £925,001 to £1,500,000 | 10% |
| over £1,500,000 | 12% |
Before the reforms were made in 4 December 2014 the rates were:
| Consideration | Rate (paid on portion in band) |
|---|---|
| up to £125,000 | 0% |
| from £125,001 to £250,000 | 1% |
| from £250,001 to £500,000 | 3% |
| from £500,000 to £1,000,000 | 4% |
| over £1,000,001 to £2,000,000 | 5% |
| over £2,000,000 | 7% (bought by individuals) 15% (bought by corporations) |
Halifax said that the changes saved tax costs for the majority of buyers. For example, a home selling for £275,000 used to cost £8,250 in stamp duty, but since the reforms were made last December the stamp duty cost has dropped to £3,750.
Meanwhile, before the changes were made stamp duty on a £2 million home was £100,000, but has now increased to £153,750.
Only those who purchase properties worth at least £938,000 have to pay more in stamp duty under the new changes compared to before.
Sales of homes costing over £1 million dropped 10 percent in the half of 2015, compared with the first six months of 2014. There was a sales drop for properties worth over £1.5 million of 20 percent.
“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.”
Total tax levied in the UK increased to a record £7.5 billion in 2014-15.