On the 1st January 2010, homebuyers will face two tax increases; stamp duty and vat. The threshold at which stamp duty is charged will revert to £125,000 (from £175,000). In otherwords, all property sold for more than £125,000 will be subject to a 1% levy. On a property sold for £175,000, an additional amount of £1750 will need to be found for stamp duty after 1st January 2010.
VAT will also revert to 17.5% on 1st January 2010. In other words, you will be charged an extra 2.5% on professional and other fees incurred in the moving process.
You might not think many people in East Anglia will be affected - after all, house prices are, on average, above the national average and the area is reasonably affluent, isn’t it? You might be surprised to learn that the average house price in Cambridgeshire is a little under £169,000. Lowering the stamp duty threshold will affect an awful lot of properties in our area. Put simply, I suspect that from 1st January 2010, additional charges in the order of £2000 will apply to a property sold for £175,000. Happy New Year!