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Thank you George Osborne!

Thank you George Osborne for the changes made in your autumn statement on the stamp duty tax -04.12.14

The stamp duty tax just got fairer for most property purchases! The chancellor announced that stamp duty tax was going to be calculated differently and that is was going to be taking effect immediately.

 Before 4th Dec 2014, SDLT was charged as a single percentage of the property price but now it is charged at different rates depending on the portion of the purchase price that falls into each rate band.

 

Residential and mixed use properties

Purchase price of property

Rate of SDLT (percentage of portion of purchase price)

£0 - £125,000

0%

£125,001 - £250,000

2%

£250,001 - £925,000

5%

£925,001 - £1.5 million

10%

Over £1.5 million

12%

 'You have to pay Stamp Duty Land Tax (SDLT) if you buy a property in the UK over a certain price. This is charged on all purchases of houses, flats and other land and buildings.'

 This is an illustration of how it works: let's assume you're buying a property for £300,000.

 Old system: You would have paid 1% on a property between £125,000 and £250,000, but between £250,000 and £500,000 you'd pay 3%. So because the purchase price is over £250,000, you'd have paid 3% on the entire purchase price, despite only being £50,000 above the threshold. Thus, you'd have paid £9,000 in stamp duty.

 New system: You pay nothing below £125,000; 2% on between £125,000 and £250,000, and 5% on the value of the property above £250,000. So in total this means you'll pay £5,000 (£0+£2,500+£2,500).

 I feel that this system is fairer for home owners and small property investors. If you buy houses over £937,000 then the stamp duty tax you will be paying will be higher than before.

 Most of my purchases are way below that amount, so overall good news for the small property investor.

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