Today (3rd December 2014), in his Autumn Statement, George Osborne announced an unexpected but welcome change to the rates of Stamp Duty paid on property purchases. Not only were there changes in the rates but on the way the duty is calculated.
Previously, Stamp Duty was calculated on the whole purchase price using one rate. Now the amount is calculated in tiers according to the purchase price.
The main difference is that no Stamp Duty is payable on the first £125,000 of the purchase price which means that the majority of buyers will be better off in the new system. The tiered rates of Stamp Duty are as follows:
First £125,000 of purchase price – nil
Between £125,000 and £250,000 – 2%
Between £250,000 and £925,000 – 5%
Between £925,000 and £1.5m – 10%
Balance over £1.5m – 12%
Here are some expamples of what you might pay using the new rates of stamp duty announced today: