Proposed Stamp Duty changes create Spring surge in property transactions

Are you thinking of buying or selling a property? Spring and early Summer are well known to be the busiest seasons of the year for residential conveyancing transactions and you are no doubt already beginning to notice higher numbers of “Sale Agreed” and “Sold” signs. Once the dark winter evenings begin to lift we tend to have more energy and motivation to think about selling and/or buying a property. Spring always proves to be a very busy time of year for vendors preparing their properties for sale and indeed potential purchasers scouring property news and estate agent windows, keen to find their dream home.

The traditional winter lull has ended sooner than usual this year due to the new Stamp Duty Land Tax (SDLT) rates coming into effect on 1st April 2016. From 1st April 2016 higher Stamp Duty rates will be applied to those who are purchasing additional residential properties. For example, if you are purchasing a buy-to-let or second property in addition to your main home you will be subject to higher Stamp Duty rates. The table below illustrates the existing rates and the higher rates applicable as of 1st April 2016.

 

Band Existing residential SDLT rates New additional property SDLT rates
£0* – £125k 0% 3%
£125,001 – £250k 2% 5%
£250,001 – £925k 5% 8%
£925,001 – £1.5m 10% 13%
£1,500.001 + 12% 15%

 

*Only applies to purchases over £40,000. For purchases at £40,000 or under no SDLT return is required.

These changes have had quite an immediate impact on the market already this year and we are seeing a surge in transactions due to those interested in buying a second property or a buy-to-let property pushing to complete their purchases by 31st March 2016. Generally however, it is predicted that house price growth in Northern Ireland will be moderate in 2016. The latest Residential Market Survey from Ulster Bank and The Royal Institution of Chartered Surveyors (RICS) re-enforces this belief. RICS says that after the current surge dies down, price growth will slow down throughout the remainder of 2016 and it anticipates overall price growth to be in or around 5% in 2016 as opposed to 11% in 2015.

If you are considering selling or buying a property and would like some advice on the processes and likely costs involved, or if you need specific advice about the Stamp Duty changes, please contact our conveyancing department on 028 90 329801 / legal@mtb-law.co.uk. You can also google MTB Solicitors and browse our new website. We offer a discount on our professional fees for all NIPSA members and would be only too happy to offer our advice and assistance to you.