In a nutshell, the changes which came into effect from the 4 December 2014, mean that while the tax is increased on the most expensive 2% of homes, the majority of 98% will see a reduction is the amount of stamp duty payable. This is because SDLT was previously charged at a single rate to the entire price of the property. However, from 4 December 2014 SDLT is charged at increasing rates for each portion of the price.
So, under the new regime there is no tax paid on the first £125,000, 2% on the amount above that up to £250,000, then 5% on the next amount up to £925,000, then 10% on amounts above that up to £1.5 million and then 12% on everything above that.
According to the Money Advice Bureau, buyers in the South East and London saw the biggest savings of around £3,870 and £4,600 respectively as a result of the reform compared with buyers in the North West who saw average savings of £1,059.
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