Lower Stamp Duty Tax For England & Wales

A cut in Stamp Duty Land Tax (SDLT) for first-time buyers, has been announced to take effect immediately.

It is expected a cut to stamp duty will help more than a million first-time buyers get onto the housing ladder in the next five years.

The cut will be for all stamp duty for first-time buyers on properties up to £300,000. It will also apply to the first £300,000 for properties worth up to £500,000 purchased by first-time buyers.

This would bring: “A stamp duty cut for 95% of all first-time buyers who pay the tax. And no stamp duty at all for 80% of first time buyers from today.”

According to HM Treasury, as a result of these changes:

In every region of England outside London, and in Wales and Northern Ireland, the average first-time buyer property will pay NO stamp duty.

The stamp duty bill of the average first-time buyer in London will nearly halve, from £10,500 to £5,500.

Property Stamp Duty Land Tax for England, Wales & Northern Ireland SDLT rate
Up to £125,000 Zero
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

Example: If you were to buy a house for £275,000, the SDLT you owe is calculated as follows:

  • 0% on the first £125,000 = £0
  • 2% on the next £125,000 = £2,500
  • 5% on the final £25,000 = £1,250
  • Total SDLT = £3,750

Calculate the cost of buying a property by clicking here clicking here

Get Mortgage Advice today by clicking here

 

In SCOTLAND:

This first Time Buyer provision will NOT apply to Scotland who have independent control over Stamp Duty and who will continue to pay at the following rates.

How much it costs and when it is paid currently in Scotland.

Purchase price LBTT rate
Up to £145,000 0%
Above £145,000 to £250,000 2%
Above £250,000 to £325,000 5%
Above £325,000 to £750,000 10%
Over £750,000 12%

You pay the tax when you:

  • buy a property
  • buy a new or existing property
  • buy a property through a shared ownership scheme
  • are transferring land or property in exchange for payment, e.g. you take on a mortgage or buy a share in a house.

Example; If you were to buy a house in Scotland for £275,000, the LBTTyou owe would amount to £3,350 and is calculated as follows

Tax Band % Taxable Sum Tax
less than £145k 0 £0 £0
£145k to £250k 2 £105,000 £2,100
£250k to £325k 5 £25,000 £1,250
£325k to £750k 10 £0 £0
rest over £750k 12 £0 £0

Get Mortgage Advice today by clicking here

The above post is intended to be informative but does not constitute advice – financial, legal or otherwise. Any opinions given are the author’s own and do not necessarily reflect the views of Mortgage Finder

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Leave a Reply

Your email address will not be published. Required fields are marked *