Changes To Stamp Duty Land Tax Legislation
Feb 7, 2015
How is the new system different?
From midnight on 3rd December 2014, new rates of stamp duty land tax applied and the new rates now only apply to the amount of the purchase price that falls within the particular duty band. In other words, someone buying a house for £200,000 will pay nothing on the first £125,000, and then 2% of the next £75,000, giving them a bill of £1500. Before 3 December 2004 they would have paid 1% on the total purchase price, giving them a bill of £2,000. Thus although the percentage rates appear higher in some cases, the overall charge will mostly be lower.
Someone buying a home for an average price in England and Wales will now pay £4,500 less in stamp duty land tax. The new system now also smoothes out the sudden jumps compared to the previous stamp duty land tax thresholds. In this way the new system does work similar to income tax.
What will buyers pay?
The government has created a stamp duty land tax calculator to help buyers, but some examples are listed here:
George Osborne had said that 98% of homeowners in England and Wales would pay less after the changes than they do under the current system. Only people who buy homes worth more than £937,000 will pay more in tax.
From this point of view there is no better time to seek to find the home of your dreams, as you will incur less tax in the purchase of your home. Call Jane Derbyshire to obtain a free, no obligation quote on (01264) 353411 or by email email@example.com
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