How will London buyers and sellers benefit from new-look stamp duty?

Roy Brooks Estate Agency discusses the impact of George Osborne's stamp duty reform for property buyers and sellers in South London.

With all the furore surrounding Christmas, New Year and, er, Valentine's Day, you may not have had the time to truly digest George Osborne's stamp duty reform, which was announced in early December.

The headline was that the new system, according to the chancellor, will save 98% of homebuyers money when it comes to paying Stamp Duty Land Tax. It has been widely acknowledged that those at the very top end of the property market will make up the 2% that won't save money under the new system. In fact, many multi-million pound transactions were pushed through before the midnight deadline on December 3.

The old system, the scourge of many property buyers and sellers, was known as a 'slab tax'. It was so unpopular because tax was charged as a percentage of the whole purchase price. So, for example, if you were buying a property for 250,001, you would be paying significantly more stamp duty than if you were buying one for 249,999.

The benefit of the new system, which is similar to income tax, is that that each tax rate will apply only to the particular slice of the selling price to which they apply. Sound confusing? Well, it isn't really. If you are buying a property for 300,000, under the new system you will pay no tax on the first 125,000, 2% the next 125,000 and 5% on the final 50,000. This equates to a bill of 5,000. Before December, a 300,000 property would have cost 9,000 in stamp duty - as the buyer would have had to pay a tax of 3% on the whole 300,000.

If you haven't had a chance to look yet, here are the new rates in full:

- No tax on the first 125,000 paid

- 2% on the portion up to 250,000

- 5% up to 925,000

- 10% up to 1.5 million

- 12% on everything above that

So it's pretty clear why these new rates will benefit property buyers, but it is also great news for sellers.

Research by property portal Zoopla found that in the twelve months to May 2014, 28,635 properties on the site had been under-priced in order to make them more appealing to buyers.

It also predicted that the new rates could earn the average property seller an extra 7,500 in money which was previously lost due to lowering asking prices below certain tax bands to attract property buyers.

What's more - music to the ears of Britain's property sellers- the National Association of Estate Agents (NAEA) has reported that stamp duty reform has sparked the buying market back into life.

The Association's December Housing Market Report recorded the highest number of registered buyers per branch in a decade. During the final month of the year there was an average of 360 buyers per NAEA member agent branch, the first time this number was achieved since December 2004.

It may have taken 300 years but it seems the new system really will be worth the wait for property buyers and sellers in London and beyond.

For any advice on buying and selling property in Nunhead, Peckham and the surrounding areas, the team at Roy Brooks would be delighted to help. You can contact us on: 020 8299 3021.