4 Dec

Stamp Duty Reforms on Residential Property

A day before the new rules start today, the Chancellor announced changes to the Stamp Duty Land Tax, which will cut stamp duty for the majority of homebuyers. Under the new rules, purchasers buying houses under £937,500 will now be better off which broadly equate to 98% of residential transactions. On the other hand, homes that cost above £937,500 will find an increase in their stamp duty bill. The new rules start on 4 December 2014 – but for those who had exchanged contracts but not completed by midnight of 3 December 2014, there is the option to choose whether they want to pay under the old scheme or the new one. It has been said that many buyers and lawyers have rushed into an exchange of contract on the day of the announcement in order to save on the Stamp Duty. Here are the new stamp duty bands: Up to £ 125,000 – 0% Portion up to £250,000 – 2% Portion up to £925,000 – 5% Portion up to £1.5 million – 10% Above £1.5 million – 12% These are the stamp duty bands under the previous scheme: Up to £125,000 – 0% £125,001 to £250,000 – 1% £250,001 to £500,000 – 3% £500,001 to £1 million – 4% £1,000,001 - £2 million – 5% Above £2 million - 7% Details of the Stamp Duty Reforms can be found in the Factsheet published by the Government: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/382324/Stamp_Duty_15.pdf

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