Stamp duty has changed and this time the changes are permanent. This week saw a Budget announcement from the new Chancellor in which a set of economic policies were announced. A change to stamp duty was one of the policies at the forefront of the announcement.
Stamp duty land tax (SDLT) is tax paid when purchasing residential property. The amount paid is predominantly dependent on the purchase price of the property. Stamp duty is a progressive tax meaning the rate at which tax is paid increases as the taxable amount increases. In this case, the rate at which stamp duty is paid increases as the property price increases.
Following the Budget announcement, the headline changes are as follows:
- 0% on a property value up to £250,000, increased from £125,000
- 0% on a property value up to £425,000 for first time buyers, increased from £300,000
- Reduced rates on a property value up to £625,000 for first time buyers, increased from £500,000
Standard rates for Stamp Duty are now charged as follows:
- 0% up to £250,000
- 5% from £250,001 up to £925,000
- 10% from £925,001 up to £1,500,000
- 12% above £1,500,001
Other factors do affect stamp duty liability. If you’re purchasing an additional property, whether that be a buy to let or a second home, there is a 3% surcharge on top of the standard rates payable. For non-UK residents, there is also a 2% surcharge on top of the standard rates payable. Dependent on circumstances, there can be other conditions and exceptions which come into play. For more information on stamp duty, get in touch.
With the changes in stamp duty, many people will no longer have to consider this cost when buying a new home. However, if you are liable for stamp duty, being aware of how much you’ll have to pay is as important as always. As the purchase price increases, stamp duty can quickly become considerable so it is essential that it is budgeted for. Stamp duty calculators are available online or if you’d prefer to talk it through with someone, we can run through the calculation with you.
As a mortgage broker we’re not tax advisors, but we can certainly help you understand and calculate what the stamp duty liability would be. If you’re looking to move and you want to discuss stamp duty, or you’ve got any other mortgage and life insurance queries, we’re here to help with free, professional advice.