Stamp Duty Land Tax Reform 2014
2 minute read
On the 3rd December 2014, during his Autumn Statement the Chancellor George Osborne announced a complete reform of Stamp Duty Land Tax (SDLT) and abolished the existing slab structure. The Chancellor has said that the new rates will reduce stamp duty for 98% of buyer. The new Reform will come into effect on the 4th December In England and Wales. However, in Scotland different rates will apply from the 1st April 2015 when Land and Buildings Transaction Tax (LBTT) replace SDLT.
Stamp Duty from 4th December
For those who exchanged their contracts on or before 3rd December and the transaction is completed on the 4th December or later, then they will be able to choose if they follow the old or new rules. The new rate of Stamp Duty is as follows: Purchase Price of Property New Stamp Duty (percentage of portion of purchase price) Up to £125,000 0% £125,001 to £250,000 2% £250,001 to £925,000 5% £925,001 to £1.5million 10% Over £1,5000,001 12% Previously, the SDLT was charged as a single percentage of the property price. Now it will be charged at the different rates depending how much of the purchase price falls into each band. For example:- Purchase Price – £185,000 Up to £125,000 – No Stamp Duty £125,001 – £185,000 – You would pay 2% on £59,999 Stamp Duty Payable – £1,200
The Old Stamp Duty Rules
Under the old rules the levy on property kicked in at £125,000 at a rate of 1%; it then jumped to 3% of the property’s price when it hit £250,001; buyers then paid 4% when the property value went up to £500,001; properties over £1million had a 5% levy; and finally 7% was levied on properties priced at £2million and higher.