What about the 2014 changes?
Under the old rules, you paid a flat rate depending on the value of your property – that same rate applied to the entire transaction. Under the newer rules the rate changes on a sliding scale, just like income tax (see below). In Scotland Stamp Duty is known as Land and Buildings Transaction Tax (LBTT).
How much is Stamp Duty?
New stamp duty rates paid on the part of the property price within each tax band
|0 – £125,000
|£125,001 to £250,000
|£250,001 to £925,000
|£925,001 to £1.5 million
|More than £1.5m
So what does that actually mean…
For 98 per cent* of those who pay stamp duty, these new rules mean that you’ll be paying less than before.
… for a property worth £185,000?
Previously, you would have paid £1,850 in stamp duty. Now you will only have to pay £1,200, saving you £650.
… for a property worth £275,000?
Before the changes buying a house for £275,000 (the average UK house price)* – for which stamp duty would have been 3% – would cost you £8,250. Under the new rules, buying that same house would see you pay £3,750, saving £4,500 compared to the old rates.
… for a property worth £510,000?
For a £510,000 home, the total stamp duty would have been £20,4000 (a flat rate of 4%). Now that home would attract a stamp duty of £15,500.
Why do we have to pay it?
When you buy a property the change in land ownership has to be legally registered at the Land Registry. This process requires a certificate from the HMRC – which they will only issue on receipt of the Stamp Duty due on the purchase of the property. So, put simply, if you don't pay the Stamp Duty, you can't buy your new home. Luckily, you don't have to worry about it as it’s one of the things your solicitor takes care of.
Where did it come from?
It’s an ancient tax, first introduced in the UK in 1694 during the reign of William and Mary to raise money for the war against France. Initially, it was a tax or duty on documents that required the Royal seal (or stamp) to be legally valid ¬– documents like the transfer of ownership of land.
How can we pay it for you?
Legally, the purchaser has to pay the stamp duty land tax on their purchase. However we may be able to pay the Stamp Duty for you – just ask the Sales Adviser at the development. Should you proceed with David Wilson Homes' offer, we will pay your solicitor on completion of the purchase of your new home.
*Source: HRMC Stamp Duty Fact Sheet