New Stamp Duty Land Tax, (SDLT)
From the 4th December a new structure for Stamp duty will be imposed. Previously the tax was levied as a percentage of the purchase price, staged according to price bands and levied on the total purchase price.
The new system is tiered and thus SDLT will be calculated on the sale price taking into consideration the staged percentage platform. The new system below -
£0 - £125,000 = 0%
£125,000 - £250,000 = 2%
£250,001 - £925,000 = 5%
£925,001 - £1,500,000 = 10%
£1,500,000 - Plus = 12%
As an example if you were to purchase at £800,000 the SDLT due would be £30,000. This is calculated as 2% of £125,000 = £2,500.00 plus 5% of £550,000, (£800,000 - £250,000) = £27,500.00, Total = £30,000.00.
By comparison the old system would have seen an SDLT of £32,000.00, therefore a saving of £2,000.00
The new system is likely to save on lower level transactions with the cut off figure being £937,500.
More information can be seen on the link below -
https://www.gov.uk/stamp-duty-land-tax-rates
The link below is an easy SDLT calculator that automatically calculates the different tiered percentages.
http://www.moneysavingexpert.com/mortgages/stamp-duty#calculator