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How stamp duty changes will affect equestrian property-buyers

The tail end of 2014 saw a revolution in the stamp duty land tax regime. For residential property sales, the levy is now charged at rising rates on different portions of the sale price.

Buyers pay nothing on the first 125,000 of the price, followed by 2% on the next 125,000, 5% on the next 675,000, then 10% on the next 575,000, finally reaching 12% on the rest, if the property sells for more than 1.5m.

The chancellor estimates that 98% of homebuyers will be better off under the new system. But will it benefit equestrian buyers?

Impact on equestrian buyers

IT crucially depends on how much they pay for their new house. For example, if you buy a house priced at 550,000, you will pay a total of 17,500 in stamp duty against the 22,000 you would have paid before 4 December. But if you buy a property priced at 1.2m you will now pay 63,750 - 3,750 more than what you would have paid in the past.

As a result, the top end of the equestrian market is likely to be adversely affected by the change since buyers will offer lower than expected (and too low to be accepted) because of the 100,000 which would be due on the new stamp duty.

But the effect of the new system may not be as bad as you might fear. Equestrian buyers can still save enormously on stamp duty if they buy a mixed use property, where the levy is set at 4% for homes costing more than 500,000. This is because the new rules will not affect most equestrian yards as they will qualify for mixed use stamp duty at 4%.
Sellers of mixed use yards could benefit because the favourable stamp duty rules may make their properties even more attractive.

Under the new regime, someone buying a residential property at 5m will pay 513,750 in stamp duty, whereas if they bought a mixed use property the charge would be 200,000 saving over 300,000.

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