Published: 06/11/2018 By Patrick HenryIn June 1694 Stamp duty was introduced in England as a way of bringing in additional tax revenue through the literal stamping of legal documents. Now Stamp Duty Land Tax (SDLT) is one of the most controversial taxes in the country, especially amongst homebuyers and homeowners in the major cities. Some people see SDLT as a fair way to tax property transactions across the country whereas others –especially those on the receiving end of the higher bands – believe it to be a stifling tax which stops people from moving their way up the ladder and punishes those in major cities disproportionately.
SDLT is chargeable for all property purchases in the UK and also includes commercial leases as they are logged at the Land Registry. In 2014 and 2016 we saw dramatic changes in the way that stamp duty is calculated. Generally speaking, after the 2014 implementation it was cheaper to buy a property under £1,000,000 and more expensive to buy above (the graph below will show more accurately). However, in 2016 the chancellor took it one step further and increased the stamp duty charge by an additional 3% to anyone who is buying an ‘additional property’. This meant a 100% increase in tax from before 2014 for anyone purchasing a £2,000,000 family home if they already owned another property.
As SDLT is not worked out as a simple percentage of the purchase price and is instead calculated similarly to the way that income tax is, I would advise that anyone thinking of buying a home keeps a reference to the tax close by. There is a handy app that can calculate your stamp duty for you in an instant, its called “Stamp Duty Calculator” I personally use it almost every day when communicating with clients and would recommend that you download it for easy reference. Especially if you are planning on making an offer to purchase a property.