Autumn Statement on Stamp Duty Land Tax Reform (SDLT) welcomed by HomebuyersDecember 4, 2014
The residential property sector has reacted positively to the Chancellor’s SDLT reform welcoming the news that over 90% of homebuyers will see an SDLT reduction.
Previously homes worth up to £125,000 were exempt from SDLT but for homes in excess of £125,000, homebuyers would pay a single rate for SDLT on the entire value of the property depending on the band into which the value of the property fell.
Under the new rules, the first £125,000 of a home’s value is still completely exempt from SDLT however only its value over that amount will be taxed on the new “proportional” system. This reform means that SDLT rates apply only to that part of the property price that falls within each band as follows:
0% up to £125,000;
2% on the portion from £125,001 to £250,000;
then 5% on the portion from £250,001 to £925,000;
then 10% on the portion from £925,001 to £1.5m;
then 12% on anything over £1.5m
There is no change as to how SDLT is calculated on the purchase of non residential property or on the rent payable when a new Lease is granted.
The above changes come into effect at midnight on Thursday 4 December 2014.
The change will apply to residential property completed on or after 4 December 2014. 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 to use the old or the new rules.
For further information please contact the property department at Cleaver Fulton Rankin 028 9024 3141
Please note; the content of this article is for information purposes only and further advice should be sought from a professional legal advisor before any action is taken.