Wednesday, 3 December 2014

Shake up of Stamp Duty Land Tax rates announced today


You have to pay Stamp Duty Land Tax (SDLT) 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.
Different rates apply in Scotland from 1 April 2015 when Land and Buildings Transaction Tax (LBTT) replaces SDLT.

The SDLT rate depends on:
  • the purchase price of the property
  • whether the property is residential


SDLT rates from 4 December 2014
SDLT is charged at different rates depending on the portion of the purchase price that falls into each rate band.
Before 4 December 2014, SDLT was charged as a single percentage of the property price.
Where contracts have been exchanged on or before 3 December 2014, and the transaction is completed on 4 December or later, you can choose whether you follow the new or the old rules.

Residential properties - Purchase price of property
Rate of SDLT (percentage of portion of purchase price)

£0 - £125,000 0%
£125,001 - £250,000 2%
£250,001 - £925,000 5%
£925,001 - £1.5 million 10%
Over £1.5 million 12%


Compare this to the old rates that were:

£0 - £125,000 0%
£125,001 - £250,000 1%
£250,001 - £500,000 3%
£500,001 - £1 million 4%
£1 million - £2 million 5%
Over £2 million 7%

Remembering that now the percentage only applies to the amount of the purchase between each category

i.e. If you were purchasing a property at say £300,000 from tomorrow, you would pay as follows:
The first £125,000 would attract 0% = £Zero
The portion between 125001 and 250,000 would attract 2% = £2500
The balance of £50,000 would attract 5% = £2500
Total Stamp Duty to pay £5000
In the old regime you would pay 3% on the whole amount which equates to £9000, so today's news means you save £4000.

However, if you are buying a house worth say £250,000 the stamp duty to pay would be as follows:
The first £125,000 would attract 0% = £Zero
The second 125,000 would attract 2% = £2500
This vs £2500 which is what you would have paid before today's news so no change in this example.
Need to calculate your Stamp Duty ? Use the HM Revenues & Customs calculator here.


Need to understand the value of your property ? Give the sales team here a call to arrange a free (and no obligation) property appraisal 01264 366611 or email the sales team sales@belvoirandover.com


Spot an error ? email us greg.greatbatch@belvoirandover.com