Boris considers cutting Stamp Duty and making the seller pay it
While Boris Johnson is only just taking up his position as Prime Minister, he has previously suggested some changes he would make to the stamp duty land tax payable on the purchase of a property.
Stamp Duty is a tax that is currently paid by the purchaser of the property, with different rates applying depending on the value of the property, and whether or not the purchaser has owned or currently owns a property. Boris Johnston is re-examining a proposal by the Association of Accounting Technicians (AAT) that the obligation to pay stamp duty should fall on the seller of the property and not the purchaser. It perceives the following benefits from the switch:
- The first time buyer exemption would go, meaning the exchequer would earn an estimated £700million a year more than it is currently does.
- It will remove the need for purchasers to save what can be a significant sum, thereby improving the chances of some first time buyers overcoming the affordability hurdle.
- Home movers should save money as they will pay stamp duty on what tends to be the lower priced property that they sell, as opposed to on the larger priced property that they purchase.
One negative for home owners that has not been discussed in any great detail is the fact that people will find themselves in the position of paying stamp duty on the property they sell, having already paid stamp on it when they purchased it prior to any potential rule change. The double payment of stamp duty will be negated for people who are buying on as they would have been paying stamp duty on their new property anyway. However it will an actual double payment of stamp duty for any property owner who is only selling a property.
Boris has also promised to cut stamp duty for all property sales under £500,000, and reduce the top rate from 12% to 7% on property sales over the value of £1.5million. Those proposed changes are very much made with the English property market in mind, meaning the majority of house purchasers in Northern Ireland (or sellers if the switch is made) could be looking at a greatly reduced stamp duty land tax bill as a result of lower property prices here.
If you are buying, selling or remortgaging a house in Northern Ireland and require a property conveyancing solicitor to handle the legal process for you contact Wilson Nesbitt in Belfast or Bangor by clicking here.