At present, stamp duty is calculated as a percentage of the whole property with an increased rate triggered by being only a pound over the relevant threshold. The new measures introduced with effect from 4 December 2014 fundamentally change the way in which SDLT rates will be applied to the purchase price of properties.
The new stamp duty rate will be calculated as follows:
1. No tax on the first £125,000;
2. 2% on the portion between £125,001 to £250,000;
3. 5% between £250,001 to £925,000;
4. 10% between £925,001 to £1.5 million; and
5. 12% on everything above £1.5 million.
The Government predict that the new system will reduce the rate of SDLT for up to 98% of property purchasers.
Starting on 4 December 2014, a property purchase for £300,000 will attract SDLT of £5,000 as opposed to £9,000 under the old regime. The new system therefore saves the purchaser £4,000 on this transaction.
If you completed the purchase of your property on or before 3 December 2014 but have not yet filed your stamp duty return, you will still be liable to pay stamp duty under the old regime.