Free Valuation

Quick Search

Refine News

What is Stamp Duty Land Tax?

This tax is charged on all purchases of houses, flats and other land and buildings.

The rate of Stamp Duty Land Tax depends on:

the purchase price of the property

whether the property is residential

SDLT may also be due if you lease a property. The lease must be for at least £125,000 for residential properties or £150,000 for non-residential or mixed use.

However, the amount of tax paid to the Exchequer for house purchase is about to triple, as the average price of a property in England and Wales tops £250K.

 

This is because the Stamp Duty tax rate jumps from 1% to 3% for any residential property sold over the £250,000 threshold (£2,500 to £7,500).

 

Unlike income tax, where the 40% rate is only paid on earnings above the threshold, Stamp Duty is paid on the entire purchase price of a property.  

 

Buyers are obviously unwilling to purchase homes that are priced just over the Stamp Duty limits and this can cause houses to “bunch” together in price terms just under the thresholds.

Stamp Duty Land Tax is an important revenue earner for the Government and although the number of house sales has fallen since last decade’s boom, the Exchequer received more than £6billion from Stamp Duty tax in the 2011/2012 Financial Year.  This figure is forecast to double by 2017/2018.

The Government has also introduced the so-called “Mansion Tax” where the Stamp Duty Land Tax for private properties over £2million is 7%.  The new band brings the tax bill on the purchase of a £2m property to £140,000.   This move is predicted by the Treasury to raise £150m in 2013, rising to £300m by 2016/2017.

There used to be a time when extending one’s existing home may have been a cheaper alternative than moving to a new property.  However, The Community Infrastructure Levy (CIL) is a tax introduced for England and Wales applying to existing homes where the original space is extended by more than 100 square metres.  However, if alterations involve demolition then that floor area may be subtracted from the added space.  The rate of CIL is set by local authorities and money raised will be used to fund projects within their own areas.

For our Online Stamp Duty Calculator please click here

For full details of Stamp Duty Rates and Thresholds please visit:-

http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm

 

 

Share this article

Other News Items

  • Andrew Grant - supporting this year's Bromsgrove Carnival

  • Property fit for Royalty

  • Steering you in the right direction

Free Valuation

click here to find what
your property's worth

Buy

Sell

Information

Services

Rent

This site uses features that require cookies to be stored on your machine. To enable these features, click 'OK'

For more information on cookies and the features that use them please click here.