Stamp Duty changes: how will the new system be different?
The new rates of stamp duty will only apply to the amount of the purchase price that falls within the particular duty band, making it more like income tax.
In other words, someone buying a house for £200,000 will pay nothing on the first £125,000, and then 2% of the next £75,000, giving them a bill of £1,500. Previously they would have paid 1% on the total purchase price, giving them a bill of £2,000. Thus although the percentage rates appear higher in some cases, the overall charge will mostly be lower.
The new rates will be:
- Up to £125,000 : 0%</p>
- >£125,001 to £250,000 : 2%
- <£250,001 to £925,000 : 5%
- £925,001 to £1.5m : 10%
- Above £1.5m : 12%
Reports suggest that on average someone buying a home in England and Wales will now pay £4,500 less in stamp duty.
The following link to the Inland Revenue’s website will allow you to work out the amount of stamp duty payable in a matter of seconds:http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm
Source: MW Solicitors, South Croydon