Stamp Duty Changes to Benefit 98% of Homebuyers says Chancellor

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In today’s Autumn Statement George Osbourne revealed a number of long-awaited stamp duty reforms, meaning that homeowners will typically save thousands of pounds when purchasing a new home.

 

Essentially, the Chancellor has ended the “hated” slab system where a home purchaser pays stamp duty on the whole amount of a property even if they exceed the stamp duty threshold by as little as £1.

 

In summary:

 

  • Stamp duty is now to be levied progressively like income tax
  • New bands step up to highest level of 12% above £1.5million
  • Those buying a £300,000 home will see £4,000 cut from stamp duty bill
  • Buyers of £600,000 homes will also save £4,000

 

The new stamp duty rates are as follows:

 

  • For homes up to £125,000 no stamp duty is payable then;
  • £125,001 to £250,000 – 2%
  • £250,001 to £925,000- 5%
  • £925,001 to £1,500,00- 10%
  • £1,500,001 and above 12% 

 

You can check the stamp duty rates using the online calculator here:

 

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

 

The new rules are effective from 4th December 2014 and those home purchasers that have already exchanged contracts before this date will have a choice over which system that they decide to use.

 

The Council of Mortgage Lenders (CML) data suggests that based on purchases over the past 12 months 1.5% of purchasers would be worse off under the new system.