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Stamp Duty Reform – December 2014
The Chancellor has made a monumental change to one of the UK’s “most damaging” taxes, which should benefit 98% of homebuyers. This change applies to you if you are buying a home in the UK for over £125,000.
For purchases of residential property that complete on or after 4 December 2014, the current system, which means huge increases in tax when property values enter a new band, will be replaced by a graduated rate, similar to income tax.
The new rates are as follows:
Purchase price of property Rate paid on part of price within each band
0% on the first £125,000 0%
Over £125,000 and up to £250,000 2%
Over £250,000 and up to £925,000 5%
Over £925,000 and up to £1,500,000 10%
Over £1,500,000 12%.
Whilst the Chancellor has indicated that people in the process of purchasing would not be affected, this change will have an effect on those part way through the transaction. However, there are transitional provisions in place and you should discuss this with your Conveyancer.
The way you pay Stamp Duty is not changing. As before, a Stamp Duty Return will have to submitted within 30 days of completion, together with the relevant tax. You still have to submit a Return even if you are not due to pay any Stamp Duty on the purchase price of your property, unless the property costs less than £40,000.
If you would like further information regarding the reform, please contact me, Samantha Evans, at Terry Jones Solicitors on 01743 285888.
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