Changes to stamp duty thresholds were announced in the Spending Review and Autumn Statement in September - but what do they mean if you're planning to buy a property in the next 12 weeks? The hike has added 3 percentage points to the stamp duty paid by those who already own property, or investors, but there is no change if you are simply moving your place of residence.
The changes come into effect from April 2016 and, as a result the tax on buy-to-let or second properties will jump. If you are investing in a £250,000 house, for example, the stamp duty bill will be an extra £7,500.
In the previous change back in November 2014, stamp duty was reduced and this had a phenomenal effect on the 2015 market: It became far cheaper to buy a house over the £250,000 threshold. Across Cornwall we saw valuations for many local 'mid range' houses jump £15,000-£20,000 and the market has been strong across our region.
There is no doubt that the November 2014 improved sale prices, however looking forward to 2016, houses in this price bracket will only continue to be affordable to families if interest rates remain low.
The April 2016 stamp duty change means something very different depending on the date of sale. Pre-April is a good time to buy if you're an investor because completing on a purchase before April will mean investors avoid the extra 3% tax for second home owners and investors. Potentially resulting in a busy period for those selling houses that may appeal to this type of purchaser.
First time buyers however may find that from April onwards they are in a better position to negotiate and secure a purchase if the number of investors etc. decreases after the stamp duty increase. This group of purchasers might have missed out on properties last year as sellers may not have considered them as good a proposition as an investment buyer if both were bidding on the same property. Once the stamp duty change has come into effect, first time buyers will potentially be in a better position, not least if interest rates remain low.
In 2015 prices for properties in Truro and for mid-range properties across Cornwall were pushed up. There was a higher influx of buyers from the South East and Home Counties migrating to Cornwall than we have seen in recent years. But interestingly these buyers were purchasing family homes, not so much investment properties.