Another fine mess of stamp duty rate changes in the last budget means that buyers are going feel even more pain at the rate change pinch points. The current government will be adding another pinch point at £1M from April next year. Over 48% of property in Kensington is worth over £1M! Lets look at the difference that a £1 makes to a buyers Stamp duty liability.

PURCHASE   (%)    PAYMENT
£250,000   (1%) = £2,500
£250,001   (3%) = £7,500
£500,000   (3%) = £15,000
£500,001   (4%) = £20,000
£1,000,000 (4%) = £40,000
£1,000,001 (5%) = £50,000 (from 6th April 2011)

Sellers can feel no sense of satisfaction either as this causes properties for sale to clump together at around/ just below the break points. This is easily demonstrated – There are about  480 vendors selling [on Globrix] at between £499,000 – £500,000.  Is not one of them convinced their property is worth a penny more than £500,000?  My bet is that the current number of 140 properties for sale at £999,000 – £1m will at least double from April 2011 when the 5% payment applies above £1m.

Labels: buying property, SDLT, Stamp Duty

1. Don’t even think about starting until you are ready, able and willing to commit.
2. Plan your search.  Be methodical.
3. Don’t over rely on property portals. Only use them to get an initial picture.
4. Take care to instruct a fully compliant and competent solicitor – willing to carry out an attended exchange if necessary
5. Find a good cooperative surveyor first. If a lender is involved he should be on their panel.
6. Give feedback inmmediately. Especially at the viewing.  Both good and bad.
7. Don’t be led by the Estate Agent. Be in control.
8. Don’t spend disproportionate amounts of time with agents that arent helping you.
9. Be available to view
10. Use a good home finder!

Labels: buying property, Property Search