In his 2014 Autumn Statement the Chancellor of the Exchequer, George Osborne, announced a fairer way that Stamp Duty (Stamp Duty Land Tax or SDLT) on home purchases is to be calculated and levied from today Thursday 4th December 2014.
He suggests that 98% of homeowners in England and Wales will now pay less than they did under the previous system and only people who buy homes worth more than £937,000 will pay more in tax. On average, people buying a home in England and Wales should now pay around £4,500 less in stamp duty according to his figures.
Under the new system 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.
The new rates will be:
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5m | 10% |
| Above £1.5m | 12% |
For example, 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 £1500. 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.
To assist buyers the Government have produced a helpful Stamp Duty Calculator.