New 2014 UK Stamp Duty Rates
The Chancellors 2014 Autumn Statement Includes Changes To UK Stamp Duty Rates
Within his autumn statement, the chancellors stated that in the region of 98% of UK home buyers will be better off following his reforms of the stamp duty system that has been announced today as part of his annual autumn statement.
Under the current system, stamp duty that is paid by a buyer increases in a way that he says is currently unfair at certain threshold levels.
The current system:
How much stamp duty will i pay?
|Purchase price/lease premium
or transfer value
|SDLT rate||SDLT rate for
|Up to £125,000||Zero||Zero|
|Over £125,000 to £250,000||1%||Zero|
|Over £250,000 to £500,000||3%||3%|
(Stamp Duty Rates correct as at March 2014)
The reforms in the system will take effect as at midnight tonight and under this system, when a property is bought, rather than being charged a single rate of tax, the buyer will only pay for the portion of the property value that falls within each band.
This is similar to the way in which income tax is calculated.
How does the new system work?
So the reformed tax system means that in future, nobody will pay any stamp duty at all on the first £125,000 of their property’s value.
Then after that, tax comes into play at 2% on the amount from £125,001 up until £250,000.
The steps continue that a 5% band applies on all property values from £250,001 up until £925,000.
With a rate of 10% applying on values from £925,001 up to £1.5m.
and then a final rate of 12% that applies on any value that is above £1.5M.
So, what does this mean to the amount of UK stamp duty paid on an average house purchase?
The current house value in the UK according to the Office for National Statistics (ONS) is £272,000.
So using the new stamp duty system means that the stamp duty payable on this purchase is £3,600, which is a reduction of £4,560 compared to the £8,160 that someone completing on their house purchase today will have paid – Guess alot of people might be wishing they had waited, but on the other hand, in this times of austerity, they could well have seen an increase to help plug the gap being created by the need for more money for the NHS.
If you are unsure about the effects of the reforms in the 2014 UK stamp duty rates on your house purchase, get in touch with one of our advisors by clicking here and have a chat or Click on the following link to use the official UK Stamp Duty Calculator Provided By HMRC to work out your own stamp duty calculation.