UK Homebuyers Back After Tax Changes Boost Real Estate Market

Changes to stamp duty announced eight weeks ago led to the highest number of buyers visiting estate agents in December for 10 years, according to the National Association of Estate Agents.

Association members reported the number of house buyers registered in December was on average 360 per branch; the last time December visits were this high was in 2004.

The industry body also said that a fifth of agents saw more sales in properties in the £251,000 to £925,000 band, the price bracket where the stamp duty reforms offer the highest savings.

Under the old system of stamp duty the entire cost of a property was taxed according to the highest band it fell into; there were sharp increases at each threshold. The “cliff edge” was particularly unpopular at the level of £250,000, where a rate of 3% kicked in, which meant that while a home costing £249,000 attracted duty of just £2,490, anyone spending £251,000 faced a tax bill of £7,530.

The new system means there are no big leaps in duty and house sales will no longer cluster just under each of the thresholds.

via The Guardian

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