Posted on 3.12.14
George Osborne has today unveiled in his Autumn Statement the major reform to stamp duty calculations and what effect this will have on those looking to purchase a new home from midnight tonight.
But how will this affect you? Are you better or worse off under the new regime? Will it make it easier for people to get on the property ladder? Let Gorvins explain…
The new stamp duty structure which will come into force for residential properties across the UK from midnight tonight will see the old slab structure abolished. The current system, where the amount owed jumps at each threshold level will be replaced by a graduated rate to work in a similar way to income tax.
Put simply the new stamp duty rates will only apply to the part of the property price that falls within that band. This progressive structure means there will be no tax paid on the first £125,000, followed by 2% on the amount above that up to £250,000 then 5% on the next amount up to £925,000 and then 10% on amounts above that up to £1.5 million and finally 12% on everything above that.
The changes mean that those buying homes worth up to £937,500 will pay less stamp duty. But above this value, buyers will be paying more.
|Purchase price of property||Rate paid on part of price within each band|
|Up to £125,000||0%|
|Over £125,000 and up to £250,000||2%|
|Over £250,000 and up to £925,000||5%|
|Over £925,00 and up to £1,500,000||10%|
How does this affect you?
The new regime means for anyone facing a higher bill under the changed rules will need to exchange before midnight tonight in order to take advantage of the current 5% rate for £1m+ and 7% rate for £2m+ properties.
Those who have exchanged but not completed before Dec 4th on a home worth under £937,500 who might benefit from a smaller bill can opt which regime they want to choose; any clients of Gorvins currently in this situation will receive this option by your assigned solicitor.
This reform and a more progressive form of tax will result in more first-time buyers and those looking to move home will be able to pay less tax, creating more of a fluid property ladder and more affordable to buy a home.
This is a major shake-up of the stamp duty charges and Gorvins are here to help! For any questions on the new stamp duty regime or to obtain a quote on the purchase or sale of your home, contact our conveyancing team on 0161 930 5117 or e-mail email@example.com.