In his Autumn Statement George Osborne has today announced changes to Stamp Duty from which he has stated 98% of house buyers will benefit.
Stamp Duty Land Tax is payable if you buy a property in the UK over a certain price. This is charged on all purchases of houses, flats and other land and buildings. The tax must be paid within 30 days of the effective date of the transaction, which in most circumstances is the date of completion on the property.
Whilst it used to be that Stamp Duty was paid as a “slab structure” – a single percentage of the property price – Mr Osborne has changed this so that the tax is now paid on a graduated scale. Further, Mr Osborne has increased the percentages to be paid on different purchase prices.
Sue Woodall, Director, Solicitor and Head of Conveyancing at Astle Paterson said that “The changes which will take effect from 4th December 2014 will mean that the first £125,000.00 of a purchase price is exempt completely and thereafter a percentage will be charged on the balance of the purchase price on a sliding scale. HMRC has SDLT calculators you can use to work out how much to pay.”
For example, if you were to purchase a property for £285,000.00 then under the old rules you would have paid a total of £8,550.00 Stamp Duty (3% of the total purchase price.) However, under the new rules you will pay £4,250.00 (being 0% up to £125,000.00, 2% for the amount between £125,000.00 – £250,000.00 and 5% on the balance between £250,000.00 – £285,000.00.)
Sue Woodall confirmed that “If you are in the middle of buying or selling a home and have exchanged contracts, but not completed the deal by midnight tonight, then Mr Osborne has confirmed that you will be able to choose whether to pay under the old rules or the new.”
In respect of residential properties the new graduated rate, similar to income tax will be, £0 – £125,000 (0%), £125,001 – £250,000 (2%), £250,001 – £925,000 (5%), £925,001 – £1.5 million (10%) and over £1.5 million (12%.)
To find out more please click here https://www.gov.uk/stamp-duty-land-tax-rates.
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