The Chan­cel­lor has revealed a reform of res­i­den­tial prop­er­ty Stamp Duty Land Tax (SDLT) dur­ing his Autumn State­ment yesterday.

The pre­vi­ous slab’ SDLT sys­tem has been abol­ished in favour of new rates. These will only apply to the val­ue of the prop­er­ty which falls with­in each band, which is sim­i­lar to income tax.

The Chan­cel­lor sug­gests that 98% of house buy­ers would pay less SDLT. If you’re buy­ing a home for less than £937,500, you will pay less stamp duty, or the same.

If you are in the process of buy­ing a prop­er­ty, your Solic­i­tor will work out the SDLT you have to pay. HMRC also has an online cal­cu­la­tor to help you work out how much you will have to pay.

The new rates are set out below:

Up to £125,000 Zero
£125,001 to £250,000 2%
£250,001 to £925,000 5%
£925,001 to £1.5 mil­lion 10%
Over £1.5 mil­lion 12%

This com­pares with the old flat’ rates which applied to the whole pur­chase price and which are set out below.

Up to £125,000 Zero
Over £125,001 1%
Over £250,001 3%
Over £500,001 4%
Over £1 mil­lion 5%
Over £2 mil­lion 7%

The new régime applies to res­i­den­tial prop­er­ties com­plet­ed on or after 4 Decem­ber 2014. How­ev­er, where con­tracts exchanged on or before 3 Decem­ber 2014, and the trans­ac­tion com­pletes on or after 4 Decem­ber, the pur­chas­er will be able to choose which rules they wish to apply to them.

The rules impos­ing a 15% rate of SDLT on the acqui­si­tion of res­i­den­tial prop­er­ties above £500,000 by non-nat­ur­al per­sons” (broad­ly com­pa­nies, part­ner­ships includ­ing a com­pa­ny and col­lec­tive invest­ment schemes) remain unchanged. The changes also relate to res­i­den­tial prop­er­ty only.

Con­veyanc­ing spe­cial­ist, Quentin Dodd, said The changes, although rather sud­den, are wel­comed as the sys­tem has been in need of reform for some time. The pre­vi­ous SDLT bands were rigid & did not reflect the upwards move­ment of the aver­age house price.

The changes will help the hous­ing mar­ket gen­er­al­ly but par­tic­u­lar­ly first time buy­ers & young fam­i­lies mov­ing up the hous­ing ladder.”