Back in December 2014, the Stamp Duty Land Tax (SDLT) charged on residential property purchases saw a reform.
Prior to 4th December 2014, the so-called ‘slab basis’ of applying SDLT led to an unfairly high tax charge for those buying properties worth just above the various thresholds.
The new way of calculating Stamp Duty Land Tax however, works more like the way that Income Tax is calculated. Stamp Duty will now be payable at each rate on the portion of the purchase that falls within each band, rather than at a single rate on the whole transaction, saving buyers money in the process
There’s no tax to pay up to £125,000
£125,001 – £250,000 = 2%
£250,001 – £925,000 = 5%
£925,001 – £1.5 million = 10%
£1 million upwards = 12%
If you buy a property for £275,000, you’ll pay £3,750 of SDLT. This is made up of:
The old method (prior to 4th Dec 2014) of calculating Stamp Duty Land Tax would have cost £8,250, 3% of the purchase price between £250,000 and £500,000. That’s a whopping saving of £4,500!