Stamp duty reforms from midnight tonight.

Leon_W

The big difference is at the lower end.


Previously as soon as you tipped into the next band rate you would pay that amount on the whole purchase price. Not any longer. Purchase at £150k and the tax would be 2% of £25k = £500.


Under the old system it would be 1% of the whole £150k = £1500

MercilessKiller

Interesting - I'm buying a flat under leasehold. Does that mean I would actually pay only 1% over 125k? Referring to the below section:


SDLT on rent - new residential leasehold purchase
When a new residential lease has a substantial annual rent, SDLT is payable on both of the following, which are calculated separately and then added together:

the lease premium (purchase price) - see the table above the ‘net present value’ (NPV) of the rent payable The NPV is based on the value of the total rent over the life of the lease and can be worked out using HM Revenue and Custom’s online calculator (link below).

Net present value of rent - residential SDLT rate
£0 - £125,000 Zero
Over £125,000 1% of the value that exceeds £125,000

orionmoo

I'm currently in process of purchasing with my partner (waiting on solicitors searches and draft contract etc). Offer that was accepted on house is £210,500 - so I was due to pay £2,105 whenever the sale went through, now it'll be £1,710 - so a saving of £395 for me. Not a great deal, but it'll go towards redecoration and/or a new fridge/freezer! A welcome help

Jhoney_2

Thought it would make no difference to me...until I realised that nothing is charged on the first 125k for anybody.

That means I will also save a couple £1000's. I hope it really helps those trying to buy their first home. I can't imagine the financial struggle they face as things stand in general.

kingboth12

Can someone confirm if this will be the same for Scotland?

I expect the system will be as announced by Osbourne until Mar31st and then the 'Scottish' system would kick in from April onwards?

MercilessKiller

kingboth12 wrote: »

Can someone confirm if this will be the same for Scotland?

I expect the system will be as announced by Osbourne until Mar31st and then the 'Scottish' system would kick in from April onwards?

Why do you expect that? That would mean a £350k property costs more under the Scottish tax system. Dont forget, Scottish house prices are lower than London so it's unfair to use the same rates!

kingboth12

I wasn't trying to suggest it should be the case or not. I have had an offer accepted and plan to exchange in the next few months so trying to understand the implications.

My understanding that currently, stamp duty is the same for the whole of the UK. However recently, Scotland with devolved powers have altered the stamp duty system but this doesn't take effect until April 2015. i.e. any sales in Scotland would still be treated under 'UK' stamp duty system until there new system takes place?

Jhoney_2

The other real benefit imo, is that it allows growing families to move on without a draconian penalty for doing so (current system).

That in turn should help lessen the demand outstripping supply on existing properties as FTB etc grow out of their home when thing change e.g start a family.

Jhoney_2

kingboth12 wrote: »

My understanding that currently, stamp duty is the same for the whole of the UK. However recently, Scotland with devolved powers have altered the stamp duty system but this doesn't take effect until April 2015. i.e. any sales in Scotland would still be treated under 'UK' stamp duty system until there new system takes place?

I do believe George Osbourne stated that stamp duty etc will be the same for Scotland until April 2015.

kingboth12

Thanks jhoney.

I've managed to find this factsheet
[FONT=&quot]https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/382324/Stamp_Duty_15.pdf


It includes the statement [/FONT](which i am off to the pub to celebrate)

[FONT=&quot]In Scotland the new rates will apply until 1 [/FONT]
[FONT=&quot]April 2015, when the Land and Buildings [/FONT]
[FONT=&quot]Transaction Tax replaces stamp duty in [/FONT]
[FONT=&quot]Scotland.[/FONT]

[FONT=&quot][/FONT]
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