Transactions levels at the top end of the market remained constant under the new regime and stamp duty receipts from homes costing more than £1 million 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 shows that the benefits of this reform have been felt across the country, with homebuyers saving an estimated total of:
– £24 million in the North East or £900 for the average house
– £90 million in the North West or £700 for the average house
– £74 million in the East Midlands or £500 for the average house
– £131 million the South West or £4,800 for the average house
– £38 million in Wales or £800 for the average house
The Chancellor George 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, home buyers only 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. The IMF commented on the impact of the Stamp Duty reforms as part of its annual Article IV consultation with the UK.