Changes to stamp duty – how does this affect your house sale?
In his Autumn Statement on 3 December 2014 George Osborne announced welcome changes in the way Stamp Duty and Land Tax (SDLT) is calculated which came into effect at midnight.
This is good news for most buyers as the tax is now calculated on a band system similarly to the way income is taxed. It means that those who are buying the most expensive homes pay an increased charge to SDLT. However, it’s estimated that stamp duty will be cut for 98% of purchases.
How will it work?
Briefly, no tax will be paid on the first £125,000 of a property. 2% will be paid on the portion up to £250,000 and then 5% on the portion between £250,000 and £925,000. 10% is then paid on the next bit up to £1.5 million and then 12% on everything over that.
HMRC have provided a useful factsheet to help understand the new SDLT rates.
They also provide a Stamp Duty calculator.
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