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New Stamp Duty Land tax bands explained – 4 December 2014

Stamp duty reforms have been announced today by George Osborne in the Autumn Statement. The tax will be applied like income tax.

Firstly, there will continue to be no tax on purchases up to £125,000.

Above that there will be several bands:

• Between £125,001 and £250,000 the rate will be 2%

• Between £250,001 and £925,000 the rate will be 5%

• Between £925,001 and £1.5m the rate will be 10%

• Above £1.5m the rate will be 12%.

For example, on a £180,000 house purchase there will be no tax to pay on the first £125,000, then 2% on the remaining £55,000, which is a total bill of £1,100, versus £1,800 before the changes.

On a £300,000 house purchase there would be no tax to pay on the first £125,000, then 2% on the next £125,000 (£2,500) and 5% on the last £50,000 (£2,500). That’s a total £5,000 compared with £9,000 under the previous system.

If you are buying or selling a property, contact Philip Gallen and Company on 02890 663364