Stamp Duty Tax – The Big Change Explained by Advanced Removals Gloucester
In December 2014 there was a significant change within the stamp duty land tax and the amounts and percentages you had to pay if you were buying a house. The percentages would vary between bulk amounts but the distinction between different margins would mean if you were paying a pound more than a certain amount, you’d be paying a single rate on the whole property price, which wouldn’t stack against a new gradual system like it is now. The currents system is progressive so the percentage of tax is gradual/progressive, rather than having these dramatic spikes between price margins and having to pay somewhat unrealistic amounts because you sold a property just over the margins set.
With the new system, you will only be paying the rate of the proportionate amount that the property has sold for. To diagnose this new but somewhat complex system, we will show you an example:
We’ll use an example budget of £270,000
Under the old system, you would have had to pay 1% on a property between £125,000 and £250,000, but because your over the £250,000 margin, you have been jumped up to 3% tax for the whole purchase price of the property, regardless of how much you were over. You could of bought the house for £250,001 but because your over the margin, you would be paying the 3% rather than the 1% which would equate to £8100 of stamp duty if we are sticking to our example amount of £270,000, whereas 1% would have been £2700.
With the new system, you pay 0% tax under the margin of £125,000, 2% between £125,000 and £250,000 and 5% over the amount of £250,000. So regardless of how much you are spending, you will always be paying these set amounts, rather than paying for an increasing percentage of tax if you are spending over a certain margin. This can still occur with the new system, but the distinction in-between these margins is a lot more clearer, rather than having
Below we have a table laid out in a manner that shows what percentage you would be paying if you are buying a house in that margin. The chart is progressive and means you should end up paying less because you aren’t paying a single flat rate for the whole price of the property, you are paying for the percentages of the margins in-between, you would just be paying for more margins the higher the price of the property is.
| Purchase price | Stamp duty rate – on that portion of the purchase price |
| Up to £125,000 | 0% |
| £125,000.01 – £250,000 | 2% |
| £250,000.01 – £925,000 | 5% |
| £925,000.01 – £1,500,000 | 10% |
| £1,500,000.01 + | 12% |
In the example of the £270,000 property you would now pay under the new system £3,500 a saving of £4,600
If you are considering buying a house in the Gloucestershire area, consider using the services of Advanced Removals. We offer a professional removal service throughout Gloucestershire, from our state-of-the-art facility in Gloucester. When it comes to removals Gloucester, think Advanced Removals. Call today on 01452 617600
