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Stamp Duty Changes: What does this mean for you?

Major changes to the curent Stamp Duty tax system were announced yesterday in a move that will help thousands of house purchasers throughout the UK.

The dramatic cuts introduced by the UK Chancellor of the Exchequer, George Osborne, will be available to use immediately in Scotland from today until 1st April 2015 when the new Scottish Govenment Land and Building Transaction Tax (LBTT) will take effect.

Previously buyers would simply pay a fixed percentage on the purchase price based on the following brackets:-

Up to £125,000 - 0%

£125,001 to £250,000 - 1%

£250,001 to £500,000 - 3%

£500,000 to £1m - 4%

£1m to £2m - 5%

Over £2m- 7%

This unfair system has now been replaced by a graduated rate, working in a similar way to income tax, and will help first time buyers by reducing the burden of stamp duty, as well as allowing families to make their way up the housing ladder by reducing the burden of tax.

Under the new system you will only pay a percentage based on the amount that falls within each new tax bracket. As a result of the changes, the average house price in Scotland, currently £170,190, will see a huge drop of almost £800 in the amount of Stamp Duty being paid.

In Fife, the average house price of £143,075 will see an even larger saving of over £1,000.

The new Stamp Duty brackets are as follows:-

Up to £125,000 - 0%

Portion between £125,001 and £250,000 - 2%

Portion between £250,001 and £925,000 - 5%

Portion between £925,001 and £1.5m - 10%

Over £1.5m - 12%

To find out the amount of Stamp Duty you could now be paying HM Revenue & Customs have provided a calculator for which you only need to enter your Date of Entry and Purchase Price. This can be accessed by the following link:-

http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm

The system will change further on 1st April 2015 when the LBTT takes effect in Scotland. From this date, the threshold for tax being payable rises to £135,000 but the 5% tax band is replaced by a 10% band. 

Fords Daly Legal are able to provide any advice and assistance you may have as to how the new Stamp Duty rules will affect you so if you have any queries or questions please do not hesitate to contact our office by telephoning 01592 640630, e-mailing us at info@fordsdalylegal.co.uk or using the Contact Link at the top of this page.

 

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