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According to HM Treasury, Stamp Duty was cut for 98% of people who pay it, following the Chancellor's Autumn Statement in December 2014:-

"Under the old rules, you would have paid tax at a
single rate on the entire property price. Now you will
only pay the rate of tax on the part of the property
price within each tax band – like income tax.
Under the old rules if you bought a house for
£185,000, you would have had to pay 1% tax on
the full amount – a total of £1,850. Under the new
rules, for the same property you’ll pay nothing
on the first £125,000 and 2% on the remaining
£60,000. This works out as £1,200, a saving of
£650."

 

The new rates of Stamp Duty are as follows:-

£0 - £125,000 = 0%

£125,001 - £250,000 = 2% on the part of the purchase price in this band

£250,001 - £925,000 = 5% on the part of the purchase price in this band

£925,001 - £1,500,000 = 10% on the part of the purchase price in this band

£1,500,001 and over = 12% on the part of the purchase price in this band

 

By way of example, we list six property prices below, and the Stamp Duty payable under the old rules and the new rules for comparison:-

£125,000: no stamp duty (no change)

£185,000: OLD RULES - £1,850; NEW RULES - £1,200; SAVING £650

£275,000: OLD RULES - £8,250; NEW RULES - £3,750; SAVING £4,500

£510,000: OLD RULES - £20,400; NEW RULES - £15,500; SAVING £4,900

£937,500: £37,500 (no change)

£2,100,000: OLD RULES - £147,000; NEW RULES - £165,750; COSTING £18,750 MORE

 

We think this is a wholly sensible reform, that not only saves a lot of money for homebuyers, but stops the large hikes in stamp duty payable above the various thresholds and thereby artificially surpressing house prices in certain sectors.