New SDLT Rules
The chancellor announced a welcome change to the way Stamp Duty Land Tax (SDLT) is calculated on residential property in the Autumn Statement 2014, bringing a SDLT cut for 98% of the people who pay it.
What is changing?
Under the old rules, you had to pay tax at a single rate on the entire property price. This created illogical jumps in the amount of tax due near the thresholds. For example, if you purchased a house for £250,000, you would pay SDLT at 1% (£2,500), whereas if the house was purchased for only £50 more, at £250,050, you would pay SDLT at 3% (£7,502).
Under the new rules, you will only pay the rate of tax on the part of the property price within each tax band – similar to income tax, with 0% SDLT payable on the first £125,000 of the value of the property.
New SDLT rates
HMRC have a useful online calculator to help you work out how much stamp duty you would have to pay under these new rules.
The new rules started at 00:00 on 4th December 2014, and only apply to residential property.
If you have any questions on the new Stamp Duty rules, please don't hesitate to contact us.