SDLT Changes

For those of you thinking of moving or even buying for the first time or for investment, we had some rare good news this week from H M Treasury regarding Stamp Duty Land Tax (SDLT). The changes will reduce the SDLT payment for the majority of homebuyers. Under the old rules once the threshold was reached, you would have paid tax at a single rate based on the entire property price. From 4th December 2014 you will only pay the rate of tax on the part of the property price within each tax band – similar to the principles of income tax.

For example, if you bought a property for £180,000 under the old rules you would have had to pay 1% tax on the full amount so £1,800.00. Under the new rules, you pay nothing on the first £125k and 2% on the remaining £60k – so £1,200.00, giving a saving of £650.00

The new SDLT rates are:

Purchase price of property (£)

 

New rates on the part of property price within each tax band
0 – 125,000 0 %
125,001 – 250,000 2 %
251,000 – 925,000 5 %
925,001 – 1,500,000 10 %
1,500,001 and over 12 %