Stamp duty reform to send shock waves through central London market

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Wednesday, December 3, 2014

Whilst the stamp duty reform is great news for those purchasing property below £925,000, it is likely to send shock waves through the central London market, particularly in the £1.5m-£2m price range.  This market has been especially active with buyers sticking below the 7% Stamp Duty and proposed mansion tax thresholds.  These buyers will now have to pay a significantly higher amount.

For example, someone purchasing a £1.9m property would be paying £95,000 under the old Stamp Duty rules, whereas under the Government’s reforms announced by the Chancellor today, they will be paying almost £50,000 more at £141,750. However, those buying just above £2m won’t be quite so heavily hit, for example, someone purchasing at £2.1m will now be paying £165,750 – an increase of £18,750.

We are already seeing the effects of the reforms – we were due to exchange on a £2 million property this week and the buyer is now pushing to do this today.  I expect a lot of lawyers will be working late into tonight to exchange on sales between £1.5m and £2m!

Jamie Lester - Head of Haus

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