Home buyers will be pleased to hear that there is good news for them at last (apart from having wonderful solicitors). Stamp duty will now be banded in the same way as other taxes, so you will now not be moving into a higher percentage rate just because you pay £1 more for your property!
The bands are as follows:
£0 – £125,000 – no tax payable (as now)
£125,000 – £250,000 – 2%
£250,000 – £925,000 – 5%
£925,000 – £1,500,000 – 10%
£1,500,000 upwards – 12%
Below are some examples:
As before no tax payable on property at £125,000.
On a price of £185,000 the first £125,000 is tax free and 2% is charged on the remaining £60,000 – this gives a total of £1,200, a saving of £650 on the present system.
On a price of £510,000 – the first £125,000 is tax free and 2% is charged to £250,000. Then between £250,000 and £510,000, a charge of 5% takes place. This gives a total of £15,500 with a saving of £4,900 on the present system.
It is estimated that this will benefit 98% of people who pay stamp duty, with it being more expensive only for those in the higher price bands.
Here is a link to a fantastic stamp duty calculator that breaks down exactly the percentage you’ll pay under the new system: Stamp Duty Calculator