How much will Wigan Buyers Save On Stamp Duty ?

Interestingly, Stamp Duty was originally introduced in 1694 as a way to raise funds for The Nine Years' War (1688–1697) against Louis XIV of France and applied to property and some legal documents.

Stamp Duty has raised not an insignificant £166.53bn since 1998.

The Government currently raise £1.045bn per month from Stamp Duty Tax and this statement will remove a good chunk of that from the Chancellors coffers each month, but the Government knows a healthy property market will help the wider economy.

Before the changes, the Stamp Duty thresholds were as follows:

0% percent up to £125,000

2% of the next £125,000 (the portion from £125,001 to £250,000)

5% of the next £675,000 (the portion from £250,001 to £925,000)

10% of the next £575,000 (the portion from £925,001 to £1.5 million)

12% of the remaining amount (the portion above £1.5 million)

and now they are between the 8th July 2020 and 31st March 2021

0% percent up to £500,000

5% of the next £425,000 (the portion from £500,001 to £925,000)

10% of the next £575,000 (the portion from £925,001 to £1.5 million)

12% of the remaining amount (the portion above £1.5 million)

Landlords and Buy to Let Landlords will also benefit from these reduced rates, but will still have to pay their additional premium for second homes.

If these rules had been in place exactly a year ago for Wigan properties purchased under £500,000 (i.e. between 8th July 2019 and 31st March 2020).

Stamp Duty would not have been paid on 1,133

Wigan properties, worth in total £225,952,400

However, short-lived changes to property taxation risk warping the property market and generating a ‘property market hangover’ in Spring 2021.

Some are suggesting this could lead to ‘famine’ down the line as it will stop people moving into the late spring and summer of 2021.

History tells us a different story.

In 1991 the Government raised the Stamp Duty threshold at which house buyers started paying.

Gordon Brown did so in 2008 when we went into the Credit Crunch.

More recently, both George Osborne and Philip Hammond fine-tuned Stamp Duty.

Landlords had to pay an additional Stamp Duty Premium after March 2016.

First-time buyers paid less Stamp Duty and the purchasers of more expensive homes (over £1.5m) paid more.

The Stamp Duty changes for landlords in 2016 affected the property market only for a short and transactions levels soon returned to normal.

However, in 1991, John Major’s Stamp Duty change encouraged home buyers to bring forward home purchases but nevertheless the property market ground to a standstill again once the benefit ended.

The average Stamp Duty paid by those Wigan homebuyers in the 9 months between 8th July 2019 and 31st March 2020 was £1,489

Reducing Stamp Duty will undoubtedly help the wider UK economy, and at least contain some of the damage from the Coronavirus, because it will give home movers more disposable income to spend in other sectors.

Happy House Hunting 

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