Property purchases across Britain are collapsing as buyers encounter unanticipated tax liabilities after the Government's latest stamp duty reforms.
In fact, estate agents have reported a jump in withdrawn offers after buyers realise their tax calculations are thousands of pounds short.
Since April, properties that were once considered affordable have now become financially unviable.
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Agents have observed a startling surge in withdrawn offers
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Kevin Barzegar, who heads Kaybridge Residential estate agency in Epsom, has witnessed the turmoil directly, saying: "We're getting calls from buyers who've had offers accepted, only to find out weeks later that their stamp duty bill is thousands more than expected."
The stamp duty exemption ceiling for first-time purchasers has plummeted from £425,000 to £300,000, leaving many facing unexpected tax obligations. Properties that previously attracted no duty now carry substantial charges.
A first-time purchaser considering a £350,000 home would have paid nothing under the previous system. That same buyer now comes face-to-face with a £2,500 tax bill - funds that many haven't allocated in their budgets.
Investment property buyers and those purchasing holiday homes face even steeper increases. The additional charge has risen from three per cent to five per cent, adding £8,000 to the tax burden on a £400,000 second property.
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These alterations have left purchasers who calculated their finances based on previous rates facing shortfalls that make their planned acquisitions impossible.
"We've had investors pull out of deals because they calculated based on the old three per cent rate," he explained. "When they realise it's actually five per cent, suddenly their investment doesn't stack up financially."
"I've seen buyers lose their deposits because they couldn't complete once they realised the true cost," Mr Barzegar said. "It's heartbreaking, but it's happening more frequently than ever."
The miscalculations follow a consistent pattern: initial excitement about a property purchase transforms into dismay when updated tax calculations reveal the true financial commitment required.
A leading mistake is buyers using an outdated stamp duty calculator
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Now, property developers and vendors are adjusting their strategies to accommodate the new financial landscape. Some are lowering their asking prices to offset purchasers' increased tax obligations, while others provide incentives such as covering legal costs or including furnishings.
"Developers who priced their new builds before April are finding they need to be more flexible," Mr Barzegar observed. "The buyers they expected at certain price points just aren't there anymore."
"The biggest mistake I'm seeing is people using outdated stamp duty calculators or relying on advice they got months ago," he warned. "The rules changed in April, and buyers must accept that their previous calculations are now worthless."
"Always run updated tax calculations before you even start viewing properties," the expert advised.