On Wednesday afternoon I was listening to the news and had to do a double-take to make sure I had heard correctly. Stamp duty. Changed. People better off. These are words that I never thought would come together for a long long time.
For most people this is genuinely good news.
Stamp Duty will now be charged as follows on a graduated basis:
Purchase Price
£0 to £125,000 NO charge at all
£125,000 to £250,000 2% (but only on the amount above £125,000)
£250,000 to £925,000 5% (but only on the amount above £250,000)
£925,000 to £1,500,000 10% (on the amount above £925,000)
£1,500,000 + 12% (on the amount above this)
Let's look at some practical examples:
Buying at £140,000
0 - £125,000 = No charge
£125,000 to £140,000 = £15,000 charged @ 2% = £300
Total NEW stamp duty charge = £300
Old Method = 1% of £140,000 = £1,400
SAVING of £1,100 under new rules
Buying at £200,000
0 - £125,000 = No charge
£125,000 to £200,000 = £75,000 charged @ 2% = £1,500
Total NEW stamp duty charge = £1,500
Old Method = 1% of £200,000 = £2,000
SAVING of £500 under new rules
Buying at £260,000
0 - £125,000 = No charge
£125,000 to £250,000 = £125,000 charged @ 2% = £2,500
£250,000 to £260,000 = £10,000 charged @ 5% = £500
Total NEW stamp duty charge = £3,000
Old Method = 3% of £260,000 = £7,800
SAVING of £4,800 under new rules
Buying at £300,000
0 - £125,000 = No charge
£125,000 to £250,000 = £125,000 charged @ 2% = £2,500
£250,000 to £300,000 = £50,000 charged @ 5% = £2,500
Total NEW stamp duty charge = £5,000
Old Method = 3% of £300,000 = £9,000
SAVING of £4,000 under new rules
Buying at £400,000
0 - £125,000 = No charge
£125,000 to £250,000 = £125,000 charged @ 2% = £2,500
£250,000 to £400,000 = £150,000 charged @ 5% = £7,500
Total NEW stamp duty charge = £10,000
Old Method = 3% of £400,000 = £12,000
SAVING of £2,000 under new rules
So you can see from the above examples that the price range that is going to benefit most from these changes is the bracket between £250,000 to £350,000. With these changes taking place immediately, even if you are already in the process of buying somewhere (but have not yet completed) then you will benefit from these changes.
For once it looks like good news which could stimulate the housing market at a time when it had just started to slow down slightly.
I will raise a glass to that - or just because Christmas is coming!
For most people this is genuinely good news.
Stamp Duty will now be charged as follows on a graduated basis:
Purchase Price
£0 to £125,000 NO charge at all
£125,000 to £250,000 2% (but only on the amount above £125,000)
£250,000 to £925,000 5% (but only on the amount above £250,000)
£925,000 to £1,500,000 10% (on the amount above £925,000)
£1,500,000 + 12% (on the amount above this)
Let's look at some practical examples:
Buying at £140,000
0 - £125,000 = No charge
£125,000 to £140,000 = £15,000 charged @ 2% = £300
Total NEW stamp duty charge = £300
Old Method = 1% of £140,000 = £1,400
SAVING of £1,100 under new rules
Buying at £200,000
0 - £125,000 = No charge
£125,000 to £200,000 = £75,000 charged @ 2% = £1,500
Total NEW stamp duty charge = £1,500
Old Method = 1% of £200,000 = £2,000
SAVING of £500 under new rules
Buying at £260,000
0 - £125,000 = No charge
£125,000 to £250,000 = £125,000 charged @ 2% = £2,500
£250,000 to £260,000 = £10,000 charged @ 5% = £500
Total NEW stamp duty charge = £3,000
Old Method = 3% of £260,000 = £7,800
SAVING of £4,800 under new rules
Buying at £300,000
0 - £125,000 = No charge
£125,000 to £250,000 = £125,000 charged @ 2% = £2,500
£250,000 to £300,000 = £50,000 charged @ 5% = £2,500
Total NEW stamp duty charge = £5,000
Old Method = 3% of £300,000 = £9,000
SAVING of £4,000 under new rules
Buying at £400,000
0 - £125,000 = No charge
£125,000 to £250,000 = £125,000 charged @ 2% = £2,500
£250,000 to £400,000 = £150,000 charged @ 5% = £7,500
Total NEW stamp duty charge = £10,000
Old Method = 3% of £400,000 = £12,000
SAVING of £2,000 under new rules
So you can see from the above examples that the price range that is going to benefit most from these changes is the bracket between £250,000 to £350,000. With these changes taking place immediately, even if you are already in the process of buying somewhere (but have not yet completed) then you will benefit from these changes.
For once it looks like good news which could stimulate the housing market at a time when it had just started to slow down slightly.
I will raise a glass to that - or just because Christmas is coming!