Now that the first phase of the stamp duty holiday has ended, we can assess the impact on the pockets of buyers across the country. Those purchasing in expensive markets, especially those in the south of England, will be hit hardest. In some cases, they will see their tax bills rise by more than £10,000.
Until 30th June, the threshold for paying stamp duty was £500,000, but this has now fallen to £250,000 for sales that complete by 30th September. While the initial holiday lifted 85% of movers out of paying stamp duty, this figure has now fallen to 48%. When the holiday comes to a close at the end of September, just 13% of movers will pay no stamp duty.
The reduction in the nil rate band from £500,000 to £250,000 means that the average stamp duty bill for a home mover in England will increase by £3,720 – from £3,240 for property purchases that completed before the end of June to £6,960 now.
However, this average figure, which is based on sales from the last 12 months, masks significant regional differences. London buyers will be worst affected by the tapering, with buyers in 9 of the 10 local authorities facing the biggest increases in stamp duty bills located in the capital.
Before June, 51% of movers in London were not liable to pay any stamp duty. However, this proportion will fall to just 6% during the three months up until October.
In the City of London, where the average property price is £998,865, stamp duty bills will rise by an average of £12,209 to £46,441. In Kensington and Chelsea, where homes cost £2,201,885 on average, tax bills will increase by £11,904 to £110,214.
For purchasers in South Buckinghamshire, the only non-London location in the top 10 and where homes cost an average of £829,025, stamp duty bills will go up by £10,780 to £30,942.