Government announces Stamp Duty Changes
January 1, 2015
Finally some common sense has been applied to this controversial tax.
The chancellor has announced that stamp duty on home purchases in England & Wales is to be reformed from midnight on Wednesday December 3rd, along the lines of the system due to be introduced in Scotland next April.
According to HM Treasury, under the new system only people who buy homes worth more than £937,000 will pay more in tax.
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%
So for example, someone buying a house for £190,000 will pay nothing on the first £125,000, and then 2% of the next £65,000, giving them a bill of £1,300. Previously they would have paid 1% on the total purchase price, giving them a bill of £1,900. Even though the percentage rates appear higher in some cases, the overall charge will mostly be lower.
On average, someone buying a home in England and Wales will now pay £4,500 less in stamp duty.
Source: HM Treasury