» Stamp Duty dead zones
Vendors lose money on down valuations
Article Published: 20th March 2014
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Recent research from a property buying website has declared there are stamp duty ‘dead-zones’ which they have calculated has wiped away more than £260million off the collective value of properties sold in England and Wales. It has calculated this over the past two years since April 2012. It says that approximately 37,270 properties have been under-priced by vendors who have therefore avoided falling into the higher stamp duty bracket and to attract more buyers.
The average amount lost by each seller is around £7,000. Sellers with properties in the £250k bracket are those that are the most mindful about whether it is worth listing a property for a figure just above that or to keep it below the three per cent tax bracket and pay just one per cent stamp duty. The number of properties within the sales price of £250k to £265k was 60 per cent less than expected and there were around 25,000 properties sold just under the price bracket to keep the cost of the tax below 3 per cent. A penny over the £250,000 mark and the stamp duty would rise by a further £5,000.
The stamp duty price bands were set in the spring of 2000 and according to some reports had the figure for stamp duty brackets been raised in line with the true cost of buying a property now, the cost of a property appearing in the next bracket up should be valued at around £800,000. Properties valued up to £125k are currently exempt from any stamp duty.
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