The Treasury’s Finance Bill 2010 outlined the changes to taxation proposed by George Osborne in the emergency budget in June.
The new regime will see stamp duty paid at the current rates on transactions up to £500,000 at which point the changes will kick in. For properties worth more than £500,000 and up to £1,000,000 the tax will be set at 4% and houses worth more than a million pounds will be taxed at 5%.
Currently stamp duty is payable on all residential properties worth more than £125,000 (with the temporary exception of first time buyers). For properties worth £125,000 up to £250,000 stamp duty is set at 1%; the tax is payable at 3% for transactions with a value up to £500,000 and 4% for transactions with a value over £500,000.
The Finance Bill also exempts first time buyers from paying any stamp duty on residential purchases up to £250,000. The Bill defines first time buyer as a person who: “has not previously been a purchaser in relation to a relevant acquisition of a major interest in land which consisted of or included residential property.”
The Exchequer secretary David Gauke MP said: “We have made the tough choices needed to get our borrowing down, but we will do it in a way that is fair, protects the vulnerable and supports businesses across Britain.”
