29th February 2016
More than 780,000 homebuyers saved an estimated £657m on Stamp Duty in the year since the tax was reformed, the Chancellor of the Exchequer George Osborne has announced.
Transactions levels at the top end of the market remained constant under the new regime and stamp duty receipts from homes costing more than £1m went up by 15% across the year.
In December 2014 the government reformed the residential stamp duty system, changing it from a ‘slab’ to a ‘slice’ structure and reducing stamp duty for 98% of people who pay it.
New analysis released by HMRC showed that homebuyers saving an estimated total of:
Osborne said: “In 2014 I cut stamp duty and already three-quarters of a million home-buyers across the country have benefitted.
“The overwhelming number of home-buyers – 98% – are saving money thanks to our reform, which has done away with the unfair old system that meant increases being imposed on those paying just a pound over the threshold.
“These figures show that the benefits are being felt across the country. It’s a fair, workable, lasting reform to the taxation of housing. I am determined that this Government will continue to take bold action to support a home-owning democracy.”
Under the old slab system, homebuyers would have paid stamp duty at a single rate on the entire property price. With the new system, they pay the rate of tax on the part of the property price within each tax band.
The news coincides with new analysis from the International Monetary Fund (IMF) finding that the reform has “reduced distortions and is a step in the right direction”.