How might Stamp Duty changes affect you?
The 2014 Autumn Statement saw in a change in the way stamp duty is calculated on the purchase of a house.
For some, not much has changed, but for others, huge savings could be made.
If you purchased a property on or before 3 December 2014, stamp duty was charged on the entire purchase price at the following rates:
- 0% on a property price up to £125k
- 1% on a property price over £125k – £250k
- 3% on a property price over £250k – £500k
- 4% on a property price over £500k – £1million
- 5% on a property price over £1million – £2million
- 7% on a property price over £2million
So, if you purchased a property for £300k pre 4 December 2014, you would pay stamp duty @ 3% = £9,000.00.
If you purchase the same property today, stamp duty will be charged on a tiered basis as follows:
- 0% on the first £125k of the property price
- 2% on the next £125k of the property price
- 5% on the next £675k of the property price
- 10% on the next £575k of the property price
- 12% on the rest of the property price
So, if you purchase a property for £300k, you will now pay stamp duty as follows:
- 0% on the first £125k = £0.00
- 2% on the next £125k = £2,500.00
- 5% on the final £50k = £2,500.00.
Your total stamp duty liability would be £5,000.00, resulting in a saving of £4,000.00!
Quite a turnaround if you are purchasing for the right price and in the majority of cases, the tax savings are significant!
If, however, you are purchasing for £250k, unfortunately, nothing changes for you.
Why choose Johnson & Gaunt?
If the change in stamp duty charges will benefit you and you decide to make that move you have been thinking about, why not contact us?
Dealing with the sale or purchase of a property is said to be one of the most stressful situations a person can deal with! We are a local, approachable firm, whose friendly and efficient staff can guide you through the processes involved.
For more information and assistance please contact us