Stamp Duty Land Tax
Stamp Duty on property (SDLT) is always a hot topic and seems to change every year, usually at Budget time because it is an easy and instant income raiser for any Government. It is also used by the Government to stimulate and manipulate the property market.
A temporary exemption from SDLT on properties up to £250,000 for first time buyers only was introduced in the 2010 budget in an effort to stimulate the lower end of the property market. In the 2011 budget, SDLT on properties over £1 million was increased from 4% to 5% in order to help finance the exemption. However, when the exemption was removed on 22nd March 2012, the previous increase in SDLT remained in place and indeed, in the 2012 budget, the Chancellor went much further and increased SDLT on properties over £2 million from 5% to 7% and, in an effort to clamp down on certain SDLT avoidance schemes, he introduced a penalistic 15% SDLT charge on properties over £2 million purchased by certain persons including companies.
The SDLT on residential property is currently:-
Over £125,000 – £250,000 - 1%
Over £250,000 - £500,000 - 3%
Over £500,000 - £1 million - 4%
Over £1 million - £2 million - 5%
Over £2 million – 7%
SDLT is charged at the appropriate rate on the whole of the amount paid. If you require any advice on Stamp Duty or related property matters contact David Morgan at Dyne Drewett on 01963 32374.