Today marked some significant changes to the property market in the UK which will affect almost everyone buying a home from Thursday, 4th December 2014.
In his autumn statement, the Chancellor, George Osborne, revealed big changes to the way Stamp Duty is paid on properties being sold.
Up until now, stamp duty was calculated as a percentage on the whole property price.
This meant that if you were buying a property for more than £125,000 you’d pay one per cent; three per cent for homes over £250,000 and four per cent for homes over £500,000.
It then rose to five per cent for homes over £1million and seven per cent if it’s over £2million.
That meant that if you paid even just £1 over one of the staggered threshold’s you were liable to pay the percentage on the full price of the property.
In other words, if you bought a house for £251,000 you would pay three per cent on the whole value, but only one per cent if it was £250,000 or below.
Today’s announcement will see changes which resemble the income tax system, paying a percentage of each band rather than on the whole sale price.
For example, two per cent will be paid on the amount up to £250,000; five per cent for the portion up to £925,000; 10 per cent on the portion up to £1.5million and 12 per cent on anything above that.
The government has published a Stamp Duty Land Tax Calculator to help you work the cost out. It can be found by clicking here.