Stamp Duty changes, announced by the UK government on 3 December 2014, took effect on 4 December 2014, significantly reducing Stamp Duty for the majority of property buyers. However, Stamp Duty will be replaced by Land and Buildings Transaction Tax (LBTT) in Scotland, for property purchases that complete on or after 1 April 2015, increasing the amount of tax that a buyer will have to pay on certain properties. If you live in Scotland and you fall into one of the four categories below, you have a significant incentive either to get your property onto the market in the next month or to try to secure a property purchase in the next few months.
For a full analysis of the Stamp Duty reforms, there is a detailed article on our Blog: http://www.mov8realestate.com/2015/01/changes-lbtt-rates-april/.
You are a buyer, and couldn’t previously afford the deposit for a property, but now you can.
For example, you were looking for a flat worth £255,000 and couldn’t afford the Stamp Duty of £7,650. That tax is now £2,750, saving you £4,900. There is little disadvantage for you to wait till 1 April 2015 to complete on your transaction because under the Land and Buildings Transaction Tax that will be introduced on that date you will pay £2,800 in tax. However, you have been waiting for a while to find the ideal home, and want to move now.
You want to buy a property over £254,000.
If the property transaction completes on or after 1 April 2015, you will pay more tax under the Land and Buildings Transaction Tax than you would pay if you hurry and benefit from the new Stamp Duty regime.
You want to sell a property over £254,000.
Your property will be more attractive to buyers, because they will pay less tax to the UK government under the Stamp Duty regime introduced on 4 December than they will pay to the Scottish government under Land and Buildings Transaction Tax that will be introduced on 1 April 2015. Your sale will have to complete before 1 April 2015, so you need to get it on the market soon.
You want to sell a property under £254,000 but are looking to buy a property over £254,000.
The property you are selling won’t be any more attractive to buyers now than it would be from 1 April 2015 when Land and Buildings Transaction Tax is introduced: in fact, the buyer will pay slightly less under LBTT than under the new Stamp Duty regime introduced on 4 December 2014. However, if you need to sell before you can buy, you may stand to save a considerable amount of tax on the property you are purchasing and therefore will want to get your current property sold as quickly as possible.
An Added Incentive to Get on to the Market Before 31 December 2014 – Half Price Home Reports
As an added bonus, if you are thinking of putting your property on the market soon, if you sign-up before 31 December 2014 to sell your property with us, you will benefit from our Winter Promo: a Half Price Home Report plus a free Rightmove Premium advert, saving sellers up to £750 on regular prices! For more information and to arrange a free valuation as the first step to selling, click here.
If you have any questions, please just drop us an email or give us a wee call and we will be delighted to help!