Blimey - We didn't see that coming

What have Paul Daniels and George Osborne got in common?

They both pull rabbits from hats.

Yesterday lunchtime, I settled down to my sandwich (Serrano ham and Machego with garlic mayo as it happens) when all hell broke loose.  George Osborne announced the most radical change in stamp duty since its introduction.  Instead of the arbitrary boundaries the system is now graded.  Put in simple terms

• £125,000 – No stamp duty paid
• £125,000 - £250,000 – 2% Stamp duty
• £250,000 - £925,000 –5% Stamp duty
• £925,000 – 1,500,000 –10% Stamp duty
• 1,500,000 – 12% stamp duty

What does this mean to the typical BTL investor. Well let’s look at some of our recent deals of the week and see some actual examples

Riverside Court, St Annes Park  

Asking price £132,950

Previous stamp duty - £1,329.50

New Stamp duty - £159

Saving £1170.50

Champs sur Marne, Bradley Stoke

Asking Price - £165,000

Previous Stamp Duty £1,650

New Stamp Duty £800

Saving £850

Exeter Rd, Southville

Asking Price £300,000

Previous Stamp Duty £9,000

New Stamp Duty £5,000

Saving £4,000

I am aware that any comment I make could be construed as “political”, but regardless of my affiliations this is, in my opinion, a fairer and more transparent way to administer the tax. 

In the past arbitrary boundaries meant that there was a lot of “negotiation” around the old thresholds.  At a stroke this charade has gone.  This will

• Help BTL become more attractive
• Help vendors whose property was in those awkward just over the threshold price bands
• Help first time buyers get on the ladder
• Help Furniture stores, DIY stores, tradesmen and tradeswomen.  If you're saving on stamp duty you can spend that money on doing the property up

So in my opinion the stamp duty changes are good for purchasers good for vendors and will boost ancillary businesses who rely on a buoyant property market.  What’s not to like.