The big news in the “housing market” recently is the shake-up George Osborne has brought about for tax on the sale of a property. “Stamp Duty Land Tax” (SDLT), a long vilified tax payout, has been changed in order to favour those buying smaller houses.
Previously, the SDLT was a ‘slab system’, in that it was structured on a series of “property value” margins that very suddenly caused huge increases in the amount of tax a person would have to pay on a property they were purchasing.
On the old system, a property that cost £125,000 would require no tax to be paid on it. A property that cost £125,001 would require £1,250.01 tax to be paid, just for that one extra pound.
These margins were deemed unfair by many, and finally, the system has now been changed.
Rather than have such sudden jump ups in cost, the tax is now graduated, similar to income tax.
Instead the amount that has to be paid will increase as the property price increases, in such a way that the more expensive the home is, the buyer will have to pay relatively more than those who bought smaller homes.
This move definitely benefits the buyers of cheaper homes, and moves the tax to people buying more expensive properties.
