Stamp Duty Land Tax changes

Posted by admin - December 4, 2014 8:40 am Stamp duty reform to benefit 98% of people

In George Osborne’s Autumn Statement, it was announced that from Thursday 4 December stamp duty will be cut for 98% of people who pay it.

What does this mean?

Under the old rules if you bought a house for £185,000, you would have had to pay 1% tax on the full amount – a total of £1,850. Under the new rules, for the same property you’ll pay nothing on the first £125,000 and 2% on the remaining £60,000. This works out as £1,200, a saving of £650.

In Scotland the new rates will apply until 1 April 2015, when the Land and Buildings Transaction Tax replaces stamp duty in Scotland.

The new rates of stamp duty will be as follows:

New Stamp Duty bandings

  • Up to £125k 0%
  • Up to £250k 2%
  • Up to £925k 5%
  • Up to £1.5m 10%
  • Over £1.5m 12%

The big winners will be those in the lower and middle parts of the market, where the effect will be to reduce substantially the amount of tax paid. Anyone purchasing a property up to a value of £937,500 will be no worse off under the new rules.

To calculate the new stamp duty rates visit the HMRC stamp duty calculator here

For advice on how the changes will affect your property purchase, please speak to your usual MFW contact.