{"id":68018,"date":"2016-02-28T00:15:00","date_gmt":"2016-02-28T00:15:00","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=0449d9afd78455ce493e854cdb5410ad"},"modified":"2016-02-29T12:23:57","modified_gmt":"2016-02-29T12:23:57","slug":"news-story-homebuyers-save-hundreds-of-millions-from-stamp-duty-reform","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=68018","title":{"rendered":"News story: Homebuyers save hundreds of millions from stamp duty reform"},"content":{"rendered":"<p><em>Updated:<\/em> formatting error corrected in table \u2013 \u00a3264,000 figure for London is positive not negative<\/p>\n<div class=\"govspeak\">\n<p>Over 780,000 homebuyers saved an estimated \u00a3657 million on Stamp Duty Land Tax (<abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr>) in the year since the tax was reformed, the Chancellor of the Exchequer George Osborne announced today.<\/p>\n<p>Transactions levels at the top end of the market remained constant under the new regime and stamp duty receipts from homes costing more than \u00a31 million went up by 15% across the year.<\/p>\n<p>In December 2014 the government reformed the residential stamp duty system, changing it from a \u2018slab\u2019 to a \u2018slice\u2019 structure and reducing stamp duty for 98% of people who pay it.<\/p>\n<p>New analysis released by HMRC shows that the benefits of this reform have been felt across the country, with homebuyers saving an estimated total of:<\/p>\n<ul>\n<li>\u00a324 million in the North East or \u00a3900 for the average house<\/li>\n<li>\u00a390 million in the North West or \u00a3700 for the average house<\/li>\n<li>\u00a374 million in the East Midlands or \u00a3500 for the average house<\/li>\n<li>\u00a3131 million the South West or \u00a34,800 for the average house<\/li>\n<li>\u00a338 million in Wales or \u00a3800 for the average house<\/li>\n<\/ul>\n<p>The Chancellor George Osborne said:<\/p>\n<blockquote>\n<p>In 2014 I cut stamp duty and already three-quarters of a million home-buyers across the country have benefitted. The overwhelming number of home-buyers \u2013 98% \u2013 are saving money thanks to our reform, which has done away with the unfair old system that meant increases being imposed on those paying just a pound over the threshold.<\/p>\n<p>These figures show that the benefits are being felt across the country. It\u2019s a fair, workable, lasting reform to the taxation of housing.<\/p>\n<p class=\"last-child\">I am determined that this government will continue to take bold action to support a home-owning democracy.<\/p>\n<\/blockquote>\n<p>Under the old slab system, homebuyers would have paid stamp duty at a single rate on the entire property price. With the new system, home buyers only pay the rate of tax on the part of the property price within each tax band. <\/p>\n<p>The news coincides with new analysis from the International Monetary Fund (<abbr title=\"International Monetary Fund\">IMF<\/abbr>) finding that the reform has \u201creduced distortions and is a step in the right direction.\u201d<\/p>\n<p>The <abbr title=\"International Monetary Fund\">IMF<\/abbr> commented on the impact of the Stamp Duty reforms as part of its annual Article IV consultation with the UK.<\/p>\n<h4 id=\"regional-breakdown-of-average-savings--comparing-pre-and-post-reform-sdlt\">Regional breakdown of average savings \u2013 comparing pre and post reform <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr>:<\/h4>\n<table>\n<thead>\n<tr>\n<th>Region<\/th>\n<th>Price of an average house (\u00a3 <abbr title=\"Office for National Statistics\">ONS<\/abbr> estimate Dec 2015)<\/th>\n<th>Change in <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr> liabilities for an average house (\u00a3)<\/th>\n<th>Total estimated change in <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr> liabilities (\u00a3)<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>North East<\/td>\n<td>\u00a3155,000<\/td>\n<td>-\u00a3900<\/td>\n<td>-\u00a324,000,000<\/td>\n<\/tr>\n<tr>\n<td>North West<\/td>\n<td>\u00a3182,000<\/td>\n<td>-\u00a3700<\/td>\n<td>-\u00a390,000,000<\/td>\n<\/tr>\n<tr>\n<td>Yorks &amp; Humberside<\/td>\n<td>\u00a3183,000<\/td>\n<td>-\u00a3700<\/td>\n<td>-\u00a358,000,000<\/td>\n<\/tr>\n<tr>\n<td>East Midlands<\/td>\n<td>\u00a3198,000<\/td>\n<td>-\u00a3500<\/td>\n<td>-\u00a374,000,000<\/td>\n<\/tr>\n<tr>\n<td>West Midlands<\/td>\n<td>\u00a3207,000<\/td>\n<td>-\u00a3400<\/td>\n<td>-\u00a383,000,000<\/td>\n<\/tr>\n<tr>\n<td>East of England<\/td>\n<td>\u00a3315,000<\/td>\n<td>-\u00a33,700<\/td>\n<td>-\u00a3161,000,000<\/td>\n<\/tr>\n<tr>\n<td>London<\/td>\n<td>\u00a3536,000<\/td>\n<td>-\u00a34,600<\/td>\n<td>\u00a3264,000,000<\/td>\n<\/tr>\n<tr>\n<td>South East<\/td>\n<td>\u00a3365,000<\/td>\n<td>-\u00a32,700<\/td>\n<td>-\u00a3234,000,000<\/td>\n<\/tr>\n<tr>\n<td>South West<\/td>\n<td>\u00a3261,000<\/td>\n<td>-\u00a34,800<\/td>\n<td>-\u00a3131,000,000<\/td>\n<\/tr>\n<tr>\n<td>Wales<\/td>\n<td>\u00a3175,000<\/td>\n<td>-\u00a3800<\/td>\n<td>-\u00a338,000,000<\/td>\n<\/tr>\n<tr>\n<td>Northern Ireland<\/td>\n<td>\u00a3148,000<\/td>\n<td>-\u00a31,000<\/td>\n<td>-\u00a310,000,000<\/td>\n<\/tr>\n<tr>\n<td>Scotland<\/td>\n<td>\u00a3193,000<\/td>\n<td>\u2014\u2014<\/td>\n<td>-\u00a318,000,000<\/td>\n<\/tr>\n<tr>\n<td>UK<\/td>\n<td>\u00a3288,000<\/td>\n<td>-\u00a34,200<\/td>\n<td>-\u00a3657,000,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>From 1 April 2015 <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr> in Scotland was replaced by the devolved Land and Buildings Transaction Tax system. The reduction in <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr> liabilities covers Scotland for the period that <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr> remained liable between 4 December 2014 and 31 March 2015.<\/p>\n<h2 id=\"further-inormation\">Further inormation<\/h2>\n<p>Estimates are based on a snapshot of the latest HMRC administrative data \u2013 4 December 2014 to 3 December 2015. Only residential transactions over \u00a340,000 have been included. These are preliminary estimates which are liable to change as more data become available.<\/p>\n<p>The total estimate of <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr> liabilities are based on calculating pre and post reform <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr> using only the observed price distribution of transactions in the period in question. It is not known what the price distribution of transactions would have been in the absence of the reform. There are numerous factors that influence the housing market other than the tax system (such as housing supply and demand, mortgage availability, expectations of house price changes) that could cause the price distribution and thus total estimated <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr> liabilities in each region to vary.<\/p>\n<p>The average price of a house is the mix-adjusted house price as estimated by the Office for National Statistics (<abbr title=\"Office for National Statistics\">ONS<\/abbr>). This estimate reflects the stock of housing within a region and accounts for the frequency of transactions and the occurrence of outlier transactions. This is the standard statistical practice for reporting house prices.<\/p>\n<p>The use of the <abbr title=\"Office for National Statistics\">ONS<\/abbr> mix-adjusted house price means it is not possible to divide the total liabilities by the average price to calculate the number of transactions in each region. HMRC routinely publish information on regional transactions as part of their National Statistics series.<\/p>\n<p>Whilst the average property in London saw a decrease in <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr>, London as a whole paid more <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr>. The main reason for this is the relatively high volume of properties which are worth over \u00a31 million and which ended up paying more under the new system.<\/p>\n<p>The South East saw the largest saving although it had a relatively higher average property price, as large number of properties fall between \u00a3125,000 and \u00a31 million and thus contribute to an overall estimated saving. Other regions like the North East, Wales and Northern Ireland saved less as they have fewer property transactions and many of these transactions pay no or very little <abbr title=\"Stamp Duty Land Tax\">SDLT<\/abbr> in the first place. <\/p>\n<p>Almost 85% of residential property transactions are for people\u2019s main residential home (2014-15 data). <\/p>\n<p>Under the old rules the tax rate was applied to the full amount of the property price. So for instance if you bought a house for \u00a3185,000, you would have had to pay 1% tax on the full amount \u2013 a total of \u00a31,850. Under the new rules tax is only paid on the price of the property within the relevant tax band. In this instance the tax is 2% of the value of the house over \u00a3125,000. The new tax liability in this case would be \u00a31,200.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Homebuyers have saved \u00a3657 million on stamp duty since the tax was reformed.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/68018"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=68018"}],"version-history":[{"count":1,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/68018\/revisions"}],"predecessor-version":[{"id":68039,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/68018\/revisions\/68039"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=68018"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=68018"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=68018"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}