New stamp duty regime will benefit low & middle income families

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The Chancellor of the Exchequer in the UK George Osborne has voiced his concern over the Labour party’s mansion tax plans in the Autumn Statement with the announcement that he planned a major overhaul of stamp duty on property purchases in the UK, introducing a new open-minded tax regime to replace the current land tax system.
The Chancellor of the Exchequer in the UK George Osborne has voiced his concern over the Labour party’s mansion tax plans in the Autumn Statement with the announcement that he planned a major overhaul of stamp duty on property purchases in the UK, introducing a new open-minded tax regime to replace the current land tax system.

The reform of stamp duty will mean a reduction for 98% of people who pay it in the UK, with only the highest value residential properties paying more. The future stamp duty charge will be based on bands being applied to the group that falls within a particular band.

‘I am announcing a complete reform of a tax that has been described as one of our worst-designed and most damaging of all taxes. Stamp duty is charged at a single rate on the whole purchase price of a home. It means big jumps in price and the distortions can be quite substantial at the lower end.’

Under the current system Mr Osborne stated that buying a property worth £250,000, would result in a tax amount of £2,500 (€3,158). A house worth just one pound more and you pay over £7,500, (€9,474) three times as much.

‘In recent years the burden of stamp duty has increased on low to middle income families trying to buy a new home, as prices have risen, but in future each rate will only apply to the part of the property price that falls within that band in a similar way to income tax.’

If you live in the UK the HMRC online calculator to find out how much you would pay on a new house: http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm