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The effect of the stamp duty changes

It has become known as the biggest reform since Gordon Brown last changed the stamp duty levels. George Osborne has released his plan to abolish the old-style stamp duty system, revealing that home buyers paying less than £937,000 for their new property will actually save money under the new scheme.

The Autumn Statement saw an overhaul of the system, which previously meant that buyers were charged a percentage of the entire purchase price. This caused scenarios that saw payments leap from £2500 to £7500 when the property price tipped over £250,000.

The new scheme means that stamp duty is levied on a more progressive scale, a bit like the calculation of income tax, leading George Osborne to claim that 98% of people will save money and pay less tax.

Those who will reap the biggest savings are home buyers purchasing properties valued between £250,000 and £925,000. Previously charged either 3% or 4%, the stamp duty has dropped to a flat 2% on the entire price band, meaning a previous bill of £8250 will now only be for £3750.

Those buying at over £1,000,000 will now pay either 10% or 12%, as opposed to 5% or 7% under the old rules, so will in fact be worse off.

In part of the interview process, as a mortgage professional you would talk through the associated costs involved during the house-buying process. Having gained accreditation after completing your CeMAP training, you will be best placed to provide your customers with all of the information they need to consider.

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