Stamp duty effectively abolished for most of north's housing market
THE UK Government's move to raise the threshold for paying stamp duty has effectively abolished the tax for most of the Northern Ireland housing market.
As of yesterday Stamp Duty Land Tax will only be paid on home purchases of £250,000 or more, up from the previous threshold of £125,000.
For first time buyers, they will only pay the tax if their purchase is above £425,000, up from £300,000.
In Northern Ireland, where the average house price is around £169,000, the vast majority of homebuyers are now exempt.
As stamp duty had been charged at two per cent between £125,000 and £250,000, it amounts to a saving of £2,500 for purchases in that bracket
Between January and April this year, some 5,799 homes were sold in the north.
If the new threshold had been in place then, stamp duty would not have applied in 86 per cent of sales.
Ian Creighton at law firm Wilson Nesbitt said 70 per cent of houses currently listed for sale on one of the north's largest property websites are being marketed for £250,000 or less.
“This is reflected in our own internal statistics, which reveal that in the last three months 75.6 per cent of new enquiries related to properties up to a value of £250k. The increase from £125k to £250k means that 50.1 per cent of those enquirers would now have a zero stamp duty bill compared to before the change," he said.
“With the change taking immediate effect we are revisiting all our scheduled completions and the savings have started for our clients already.”
UK Chancellor Kwasi kwarteng said: “Cuts to stamp duty will get the housing market moving and support first-time buyers to put down roots.”
The north's housing market benefited from a stamp duty holiday between June 2020 and September 2021, as part of the UK Government's post-Covid recovery measures.
Some 3,970 homes were sold in the north during the final month of the scheme, making it the busiest month for the local housing market since June 2007.
But the flurry of activity in the market post-lockdown, coupled with constraints on housing stock, was a factor in pushing the average price of a home up by £30,000 since the start of the first lockdown.
HMRC's latest data pointed to a slowing in the housing market last month. While the stamp duty cut could stimulate more sales, issues around the number of available houses to buy, could accelerate house price inflation further.