As part of his Autumn Statement for 2014, the Chancellor of the Exchequer, George Osbourne has announced measures to reform the current Stamp Duty Land Tax system.
From midnight tonight, Wednesday 3rd December, the pricing structure will be as follows, with money being paid in sections across relevant bands.
£0 to £125,000 = 0%
£125,000 to £250,000 = 2%
£250,000 to £925,000 = 5%
£925,000 to £1,500,000 = 10%
£1,500,000 and above = 12%
This means that there should no longer be the large differences in Stamp Duty payments at the changing of bands, and in general purchasers stand to save money. Examples are....
Price £172,500 PREVIOUS £3,450 NEW £950 SAVING £2,500
Price £300,000 PREVIOUS £9,000 NEW £5,000 SAVING £4,000
Price £495,000 PREVIOUS £14,850 NEW £14,750 SAVING £100
Price £505,000 PREVIOUS £20,200 NEW £15,250 SAVING £4,950
So under the new system, Stamp Duty is not paid as a percentage of the total amount. Instead, buyers will not pay any tax on the first £125,000, then depending on the purchase price will be 2% on the portion up to £250,000, 5% on the portion from £250,000 to £925,000, 10% from £925,000 to £1,500,000 and 12% on anything over £1,500,000.
The Government has said that 98% of purchasers will see a saving, and having work out some quick sums this afternoon, all of our current vendors will save, and at an average of over £2,500. If you would like to work out what you will owe, here is a SDLT calculator from HMRC http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm
If you require any further guidance on this, please don't hesitate to give us a call on 029 2070 2622.