Currently the starting point for Stamp Duty is £125,000 but with housing being a devolved matter, Wales is now joining Scotland in setting its own tax rates and giving it a new name - Land Transaction Tax. Changes will come into effect from 1st April, 2018. The Welsh Assembly has set the starting point at £150,000 and in Scotland it is already £145,000. In order to iron out the anomaly, it seems likely that Stamp Duty thresholds will increase for first-time buyers in England and Northern Ireland.
Small losses in revenue from houses sold up to say £200,000 could be offset by adjustment to other thresholds for rates charged at higher bands.
The Chancellor needs to look at both ends of the scale as there's no doubt that increases in Stamp Duty at the higher end (houses worth £1.5m - £5m) have slowed down purchases and this, in turn, impacts upon the chain: reducing rates at the higher end will increase activity in that price range and it also means extra sales facilitate the creation of chains and in some cases several other transaction which may not have happened otherwise and i.e. generate economic activity which attract VAT receipts. All good news for the Chancellor and even better for property developers. If you are a property developer looking to execute development plans post Budget then please feel free to contact founder and CEO, Ben James, for a confidential chat about how we can help you translate your plans from paper through to project completion.