In the Autumn Statement of 2014 the coalition government, at the time, were absolutely correct to get rid of the ‘slab-sided’ Stamp Duty Calculator in favour of a more progressive version in order to solve the sales of properties at around each of the margins.
For instance, properties were not sold between £2million and £2.3million since there was a great advantage to keep the price below £2million threshold as the incremental cost beyond this was a great deterrent for the purchaser. (example: the tax on a property bought under the old system at £1,950,000 was £97,500 where as at £2,050,000 it was £143,000 an increase in £46,000 for an extra £100,000 in the purchase price,which reflects a 46% tax at the margin). Continue reading