One of the major announcements by the Government in the Autumn Statement is the overhaul in stamp duty land tax (SDLT). Previously, stamp duty was charged at a percentage on the whole value of the property. For example, if you were purchasing a property for £250,000, then you would be charged 1% on the entire amount, costing £2,500. However, if you were to pay an additional £1 on the property, making the value at £250,001, then you would be charged 3% on the entire amount costing £7,500. That would be an additional £5,000 in SDLT tax.
The new overhaul on stamp duty tax works similar to income tax, in that you only pay the proportion over the threshold. Therefore, if you were to purchase a property for £200,000, there would be no stamp duty tax on the first £125,000, and 2% thereafter. This would be a charge of £1,500, compared to £2,000 under the old scheme.
The new stamp duty rates will be:
Up to £125,000 0%
£125,001 to £250,000 2%
£250,001 to £925,000 5%
£925,001 to £1.5 million 10%
Above £1.5 million 12%
The change has been praised by many. The Association of Chartered Certified Accountants (ACCA) replied to the change “We have been asking for this for years – making this tax progressive is important. Abolishing the single slab rate is a welcome move to end the significant distortions of this burdensome tax.” If you would like to know more about Stamp Duty Land Tax (SDLT), please feel free to contact us.