New Stamp Duty Rates

The Chancellor has just announced the following new rates of stamp duty on residential purchases:

• No tax on the first £125,000 paid
• 2% on the portion from £125,001 up to £250,000
• 5% on the portion from £250,001 up to to £925,000
• 10% on the portion from £925,001 up to £1.5 million
• 12% on everything above that

For the first time you only pay the rate of tax on the part of the property price within each tax band, like income tax. Under the old rules, you had to pay the tax at the highest rate applicable to the price on the entire property price.

New rates take effect from midnight.

If you have already exchanged contracts, you have a choice about whether to use the old or new rates.

These changes do not affect commercial properties, so the old rates and method of calculation continue to apply to them.

Here is a link to the HM Treasury announcement.