SDLT overhauled with immediate effect

In yesterday’s Autumn Statement Chancellor George Osborne announced a significant overhaul of the rules governing Stamp Duty Land Tax (SDLT), which will save money for 98 per cent of house buyers from today.

The old rules followed a slab system whereby tax was payable on properties at different rates depending on the price bracket they fell into. However, the new system is progressive, going up in tiers with a view to helping young professionals and families get onto the housing ladder.

The new system will see no SDLT payable on the first £125,000 of a home’s value, 2% payable on the chunk up to £250,000, 5% payable above that up to £925,000, 10% above that and up to £1.5million and 12% payable on everything above.

For a house buyer paying £200,000, under the old slab system SDLT would have been £2,000, which will now drop to £1,500 under the new system. Greater savings are made above that e.g. under the reformed system you would pay £5,000 SDLT if buying a house of £300,000 whereas under the old rules that would have been a massive £9,000.

The announcement follows pressure from industry leaders who accused the slab system of preventing first-time buyers from getting onto the property ladder. The 3% threshold which became payable at £250,000 had not been changed since 2000, although homes have increased in value by 139% in that time, making more and more people liable for the tax at that rate.

If you’d like more information on SDLT and moving home, please contact Sharon Sangha at Lawson-West on 0116 212 1000.

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