How to work out the new Stamp Duty rates from 4 December 2014
Great news for long-suffering homebuyers. The Chancellor has finally decided to look at stamp duty rates and has actually come up with something that works for most people.
Until there is sufficient time for calculators to be built please find below a chart of the new stamp duty rates that will apply.
Rather than being the flat fee calculated historically which was single percentage of the property price., SDLT is charged at different rates depending on the portion of the purchase price that falls into each rate band.
Where contracts have been exchanged on or before 3 December 2014, and the transaction is completed on 4 December or later, you can choose whether you follow the new or the old rules.
Residential properties Stamp Duty Rates
First £125,000 £Nil
£120,001 to £250,000 2% (so if £250,000 this would be £2,500)
£250,001 to £925,000 5% (so if £925,000 this would be £33,750)
£925,001 to £1,500,000 10% (so if £1,500,000 this would be £57,500)
£1,500,001 and above 12%
Quick way to work out:
If you know you are buying over £250,000 but under £925,000, which will be the majority of cases in London, all you need to do is work out the 5% band and add £2,500. For example purchasing at £480,000. £480,000 less £250,000 x 5% = £11,500 plus £2,500 = £14,000.
Just so you know under the old calculation the stamp Duty would have been £14,400 so this is a saving of £400
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Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Finance Brokers In London. His role is very much focused on Property financing both on residential and commercial lines.