If you’re planning on buying a new home in the UK, you need to know about a new tax rule that was unveiled on Tuesday.
The UK government says it’s aimed at ensuring that property prices stay in line with what would otherwise be the norm.
The move comes in the wake of a record £1.7 trillion increase in the value of the UK’s housing stock, which means that the average house is now worth £1,917,000, a 3% increase on last year.
But that’s still far below the average price of £1m for a home in New York City.
The government has also announced plans to reduce stamp duty on new homes from 1.5% to 1.2%, a move that will also affect the value.
“The Government is working to ensure that property market prices remain in line in line the current levels,” a spokesperson for the Office of Budget Responsibility said.
“Under the new rule, stamp duty will be reduced by 0.4% for all properties sold on or after April 1, 2019.”
There are some exceptions to this, however.
The tax will be phased out for properties worth £250,000 and above.
But the government says that property worth less than that will not be affected by the rule, meaning that the rules for a £500,000 home will still apply to it.
There are a number of caveats to this rule though, such as that properties that have been sold previously, but have since been sold off or redeveloped, will still be eligible for the stamp duty relief.
So, if you buy a house for £300,000 in a new market and you’re interested in selling it to pay for your first home, you can expect the stamp relief to apply to that sale, too.
There is one catch though.
Under the new rules, stamp duties will only apply to homes that have recently been resold.
“A property that has been sold for less then 10 years will not qualify for stamp duty, but any sale made after 10 years is not eligible,” the spokesperson said.
If you have any questions about the new stamp duty rules, the Office for Budget Responsibility has put a call out on Twitter.
The deadline for filing a claim for stamp relief is April 1.
This article originally appeared on The Conversation.
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