| Property News
by Peter Ledger, Residential Valuer, Newton Fallowell
Stamp Duty Land Tax - What is it? How does it affect me?
Between January 1st and July 1st 2015, a total of 252* properties over £125,000 were purchased in our local PE10 district. Stamp Duty Land Tax is therefore a serious concern, and in my role as Sales Valuer for Newton Fallowell, I consider it crucial for everyone to grasp its true meaning and what it will involve you having to pay. What does “Stamp Duty Land Tax” mean? Stamp Duty Land Tax (SDLT) is a tax levied by the Government which is paid by the purchaser on completion of a property or piece of land in England, Wales and Northern Ireland. What is the current threshold? The current SDLT threshold is £125,000 for residential property and £150,000 for non-residential property.
What are the current rates? On December 4th 2014, the Government made SDLT fairer and changed the way it is levied. The table below shows the current rates for SDLT. (See table) If I purchased a property for £265,000, how much Stamp Duty will I have to pay? If you buy a house for £265,000, the SDLT you owe is £3,250. This is calculated as follows;
Purchase Price of Property
Stamp Duty Land Tax 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%
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D I S C O V E R I N G
Bourne | January 2016
0% of the first £125,000 = £0 2% on the next £125,000 = £2,500 5% on the final £15,000 = £750 Total SDLT payable = £3,250 How will the Autumn Spending Review affect me if I want to purchase a buy-to-let property or second home? In Chancellor of the Exchequer, George Osborne’s recent spending review, it was announced that, from April 2016, higher rates of SDLT will be charged on purchases of additional residential properties above £40,000 (such as buy-to-let properties and second homes). The higher rate will be 3% higher than the current SDLT rate. I hope you have found this information interesting and informative. If you are still not clear, or need any other advice on property-related matters, please give me a call on 01778 422567. * Source: Land Registry Price Paid Data – Correct as of 3/12/15