The Budget, Stamp Duty and The Wigan Property Market
wiganpropertynews.blogspot.com
How much is your Wigan Home worth? Click here to find out for FREE
If you are buying a home in England costing more than ￡125,000, you will have to pay Stamp Duty Land Tax on the purchase of your new home and therefore it is an important factor when you are considering moving.
Last year the average UK house buyer paid
￡10,150 in Stamp Duty Tax alone
As soon as the date for the new Chancellor, Rishi Sunak’s, budget was set for 11th March 2020, conjecture in the Press began about what stamp duty changes he may disclose on budget day.
Some are asking if he will impose what was promised in the Conservative manifesto with the 3% additional Stamp Duty surcharge on non-UK resident buyers ?
There is some evidence that foreign buyers are trying to rush through their sales in
prime London locations before 11th March to ensure they don’t get hit with a new tax.
Will he go even further, and will we see a reappearance of Boris Johnson’s hitherto specified aim of eliminating Stamp Duty below ￡500k, saving many homebuyers many thousands of pounds ?
Opinions are divided on what will be included in the budget.
Most believe that the extra 3% for foreign nationals is an almost certainty, now or later.
Many believe the Chancellor could also decide to reward the North who turned the Election map ‘blue’ on the evening of 12th December with actions to enhance the housing market north of the M62 with stamp duty changes.
The best way he could do that is to raise the threshold from the current ￡125k.
This would certainly be welcome news to Wigan buyers and sellers
When Boris ran for Tory leadership back in May 2019, he said that he wanted to expand the threshold at which you begin paying stamp duty from ￡125k to ￡500k, which when you consider 7 out of 8 residential sales in 2019 were for homes below ￡500k, that would have a considerable effect. If the Stamp Duty threshold had been raised to ￡500k in 2019, then 700,400 homebuyers in England would not have paid any Stamp Duty Tax.
98.3% of Wigan properties sold last year were below ￡500k
Of the 3,612 properties sold in the last 12 months in Wigan, only 62 of those properties sold were over ￡500,000 (interesting when compared with Greater London where 44.9% of properties were below the ￡500k level).
Yet the cost to the HM Treasury would be significant. If all properties below ￡500k were exempt, the government would lose ￡2.22bn in tax receipts.
Of course, this could be made up with extra tax on empty properties or increasing the second homes Stamp Duty levy from the current 3% to say 5%, which would raise an additional ￡1.12bn on top of the current ￡1.68bn it raises for the Treasury, yet it would have a negative effect on buy-to-let landlords buying additional homes.
What almost unquestionably won’t happen is the earlier idea of switching the Stamp Duty liability from homebuyer to home seller
I also think that ultimately the Government doesn’t want to rock the boat on the wave that is being rode by the property market on the ‘Boris Bounce’ since December.
I also doubt any changes will be made to first time buyer Stamp Duty relief, as 22% of all property transactions in 2019 were to first-time buyers, and whilst it cost the Treasury (or saved the first-timer buyers) a total of ￡539m in Stamp Duty relief (an average of ￡2,411 each), the Government are keen for first time buyers to get onto the housing ladder.
Ultimately, we can only wait until The Chancellor opens his red leather box on 11th March to find out what will happen. I will of course report back after 11th of March on what (if any) changes to the tax regime will affect the Wigan property market after The Budget
How much is your Wigan Home worth? Click here to find out for FREE
One place for more information is my Wigan Property Market blog. If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Wigan property market together with regular postings on what I consider the best buy to let deals in the Wigan area, then it is well worth reading. You can also email me at [email protected] or give me a call on 01942 233999.
If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.
Don't forget to visit the links below to view back dated deals and Wigan Property News.
Blog, https://wiganpropertynews.blogspot.co.uk/
Facebook, https://www.facebook.com/alanbattuk/
Twitter, https://twitter.com/alanbattuk
LinkedIn, www.dhirubhai.net/in/alan-batt