Date: Tuesday 23 December 2014
The cost of homebuying will be cut for the majority of movers, thanks to the Government’s stamp duty reforms which took effect earlier this month.
The changes to the property tax were announced in the Treasury’s Autumn Statement and will deliver stamp duty savings to 98% of homebuyers.
Under the new system, revised stamp duty banding levels are now in effect along with a new graduated payment rate – which means that stamp duty payments will no longer simply ‘jump’ from one band to the next.
Under the new system, there will still be no stamp duty to pay on homes costing less than £125,000. Property purchases will then be subject to 2% stamp duty on the portion between £125,000 and £250,000, 5% on the portion between £250,000 and £925,000, 10% on the portion between £925,000 and £1.5 million and 12% on everything above £1.5 million.
For the average UK family home, costing £275,000, the new rules will reduce the stamp duty payable from £8,250 under the old system down to £3,750 – a saving of £4,500.
In Scotland, the new rates will be in effect until 1 April 2015 when the Land and Buildings Transaction Tax replaces stamp duty.
Karen Bremner, Head of Marketing for Taylor Wimpey, says: “The new system is fairer because it means payments are now calculated on the portion of a home’s cost above a stamp duty band, rather than jumping from one band to the next.“