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11 December 2014

King West

George Osborne swaps slab tax for graduated system

The Autumn Statement 2014

The Autumn Statement of last week prepared and presented by the Chancellor, George Osborne, procured sweeping reform to existing, antiquated stamp duty for homebuyers.

The reform reduced the burden of stamp duty for buyers in the mainstream housing market, exiting the slab system in preference for a graduated tax in the anticipation that the market expel the ‘no go zone’ prices that huge jumps in transaction tax caused under the incumbent system.

Expectation from the RICS (Royal Institute of Chartered Surveyors) is that transactions could increase by 5% over the next twelve months on the back of this measure.

Released at a time when stretched affordability, slow wage growth and political ambiguity in the journey to the May 2015 General Election would predict a dampening of spirits in the housing market, 98% of will see a better stamp duty position for the vendor and allow a healthier discussion around sale price between stakeholders in the sale of a house. House acquisitions below the £937,000 price point will see the vendor in a better stamp duty position.

Additionally, the Autumn Statement announces that the UK heads into 2015 with the strongest headline economic growth in the developed Western world further fueling belief that the green shoots of economic recovery are reaching the housing market.

The reform to stamp duty is expected to provide an overall effect on sentiment. There is an expectation that more properties will be brought to market and that an increase in the annual spring transaction window will be experienced despite the General Election of May 2015, as the realisation is made that savings are available on completing a purchase now as opposed to 12 months ago.

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