New research from My Home Move Conveyancing, the UK’s largest conveyancing services firm, has revealed that as a result of a decline in property values over the last year, the average homebuyer no longer has to pay stamp duty on their purchase in Gosport, Torbay or Portsmouth. However, it’s bad news if you live in South Derbyshire or North Warwickshire, as the annual rate of house price growth means buyers do now have to stump up for stamp duty.
My Home Move Conveyancing analysed the latest Government house price data looking at the average house price across each area of England, to reveal which areas of the market are still stamp duty exempt.
Stamp Duty Land Tax (SDLT) is a tax owed to the government when you purchase a property in England although based on current thresholds, it only applies to residential property purchases of £250,000 or more.
Just a third of local authorities stamp duty exempt
The research shows that with the average buyer in England now paying £297,735 for a home, their purchase will unfortunately come with the additional cost of SDLT. However, there are five regions of the nation where the average house price still comes in under the £250,000 threshold – the East Midlands, North East, North West, West Midlands and Yorkshire and The Humber.
Further analysis of the market at local authority level by My Home Move Conveyancing shows that while the odds are against you, a third (33%) of all local authorities are still home to an average house price that would see you pay no stamp duty.
North East home to the highest level of stamp duty free housing markets
The North East is home to the highest level of stamp duty exempt housing markets, where all 12 local authorities boast an average house price that falls below the £250,000 SDLT threshold. In Yorkshire and the Humber 87% of local authorities offer the average buyer the opportunity of a purchase without paying stamp duty, while in the North West it’s 83%.
It’s bad news for London homebuyers, as despite some sizable reductions in house prices over the last year, not one London borough sits below the stamp duty exempt threshold of £250,000, whilst the chances of a stamp duty free purchase are also slim in the South East (5%) and South West (8%).
Three areas of the market now exempt due to cooling house prices
There is some good news for buyers in the South East and South West though. As property prices have cooled over the last year, three local authorities have seen the average house price fall below the initial SDLT threshold of £250,000.
The average buyer in both Gosport and Portsmouth no longer has to pay stamp duty on their purchase, with the average house price slipping below the £250,000 threshold over the last year.
The same also goes for Torbay in the South West, with the average buyer today no longer required to pay stamp duty on their purchase.
However, it’s bad news if you’re looking to buy in either South Derbyshire or North Warwickshire, as the average house price in both local authorities has crept above the £250,000 SDLT threshold over the last year.
Director of My Home Move Conveyancing, Alistair Singer, commented:
“Stamp duty has long been a thorn in the side of the nation’s homebuyers and a further financial hoop they need to jump through before they can proceed with their plans to purchase.
We saw the market boom that came about as a result of the previous stamp duty holiday and so it’s clear that its abolition would bring a sizable boost to market activity, a boost that is arguably much needed at present as the market continues to find its feet following the lull spurred by higher interest rates.
There has been one silver lining to the cooling market conditions of the last year though, as a handful of areas have seen the average cost of a home slip beneath the initial stamp duty threshold of £250,000. We should also remember that First Time Buyers are exempt from stamp duty for purchases up to £425,000 and stamp duty is a progressive tax rather than a slab effect which means you only pay the higher rate on the additional amount above certain thresholds.
That said, with just a third of local authorities remaining stamp duty exempt, the chances are that you’ll have to be prepared to pay more to the government when you do come to buy.”
Data tables and sources
