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On 3 December 2014, the Chancellor of the Exchequer, George Osborne, announced changes to stamp duty land tax (SDLT). Unlike the previous system, SDLT will only apply to the part of the property price that falls with a specific band. The Chancellor has estimated that the reforms will result in a cut to SDLT for 98 percent of homebuyers.
In a nutshell SDLT is a tax payable by anyone who purchases property or land in the United Kingdom where the purchase price exceeds certain thresholds.
As it was the case with the old system, homebuyers who purchase a property for £125,000.00 or less do not pay SDLT. However, the significance of the new system is that no homebuyer will pay SDLT for the first £125,000.00 of the purchase price. The new rates are set out below:
Those homebuyers who exchanged contract before midnight on 3 December 2014 are able to chose whether they wish to pay SDLT based on the old system or the new system.
Anyone seeking clarification on what the difference in their SDLT liability is between the new system and the old system, or who wish to know how much SDLT they are likely to pay on their purchase, can use the HMRC Calculator.
In addition to falling below the £125,000 threshold for SDLT, there are other exemptions to SDLT regardless of the value of the transaction, and these can include:
Regardless of the changes to the amount of stamp duty that you may now be liable for, when purchasing a property the deadline for payment remains that same. Payment has to be made within 30 days of the date of completion of your purchase. Failure to do so can result in incurring late payment charges.
This article is for information purposes only and is not legal advice. It should not be acted or relied upon and legal advice should be sought before applying any of the information in this article to any facts or circumstances.