Stamp duty reform likely to inflate property prices

By Michelle Rock

The stamp duty reform announcement made in the Autumn Statement included a claim that 98 per cent of property buyers would be better off, however the good news factor is starting to give way to speculation that the real benefit will be for house sellers.

Property economists are predicting that any saving first time buyers and home movers would have made on stamp duty will just be absorbed into property prices. All house buyers are in the same position of having a bit more money to hand as a result of the stamp duty savings, which will then be reflecting on the bids made on property as they are still competing with the same potential purchasers. Another reason for thinking seller's will benefit from the changes is that the previous tax bands had a large impact on the marketing price of houses in and around £250,000, which was when the rate of tax previously jumped by an extra percentage point. As such, sellers who previously marketed their property for sale at £250,000 have now much more freedom to list it at £260,000 or higher as the previous stamp duty tax implications no longer apply.

The real winners among property buyers are those who had already agreed a purchase and the transaction was underway with the solicitors. They will have agreed a price before the reform, but will be able to benefit from paying less stamp duty.

If you are buying, selling or remortgaging a property in Northern Ireland, contact one of the conveyancing solicitors at Wilson Nesbitt for information or advice by calling 0800 840 9290.

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