The new stamp duty land tax (SDLT) regime introduced on 4th December means buy-to-let landlords will receive a welcome cut in stamp duty when buying new properties. According to Chancellor, George Osborne, 98% of purchasers will now pay less tax than under the old scheme.
The old SDLT was almost universally disliked because of the sudden jumps in the amount of tax payable once a particular threshold was exceeded. This created pricing ‘dead zones’ at amounts just above the old thresholds.
The new scheme works in much the same way as income tax, so higher tax rates are only payable on the amount over the threshold, rather than the whole purchase price, as previously.
Political game-playing aside, it’s a move that was welcomed by most in the property industry. Buy-to-let landlords looking to expand their portfolio will certainly benefit, as will most buyers who aren’t yet at the top of the property ladder – unless they live in London.
The new SDLT rates are:
From £0 to £125,000 – 0%
From £125,001 to £250,000 – 2%
From £250,001 to £925,000 – 5%
From £925,001 to £1.5m – 10%
Above £1.5m – 12%