So for the majority of landlords the Stamp Duty reform, announced in the Chancellor's Autumn statement,  is a boon for those wishing to increase their rental portfolio.

From the beginning of this month, 4th Dec (2014), the new rates come into force for those buying properties. The previous rates were implemented under a "slab structure", which was similar to the Council Tax rating. So if a house or home falls within a particular band then the property's worth is rated accordingly.

At times this system could be seen as an unfair measure as people had to pay a much higher rate of duty if they crossed a "line". Under the old system of duty a property owner would be liable to be charged ,if their home was worth £299,000, a 1% Duty = £2,990, whereas if it crept above to £250,000.1 then the bill would be increased to £7,500 = 3%.

Osborne has now introduced the measure that Stamp Duty will in effect, be the same as income tax and that the slab structure is now dispensed with.

 

So the Stamp Duty levels are:

No duty is applicable for properties worth up to £125,000
2%    rate is for values of £125,000.1 up to £250,000
5%    rate is for values of £250,000.1 up to £925,000
10%  rate is for values of  £925,000.1 up to £1.5 million
12%  rate is for all properties over £1.5 million

 

The different levels of duty now charged for a house worth £400,000 are the following. The first £125,000 would be exempt, £2,500 for the next £125,000 (2%) and then a further £7,500 on the remainder £150,000 (5%) which in total is £10,000.Under the slab structure, the duty cost would have been 3% of £400,000 = £12,000, a saving of £2,000.

 

Mark Harris, chief executive of  a mortgage broker, said: “The long overdue reform of the antiquated slab system of stamp duty will result in a much fairer regime. The reforms will negate any scheme abuse where people buy just under a threshold to avoid a big jump in duty.

“It will make it easier for first-time buyers and struggling families to get onto the ladder or move up it as they will need to set less money aside for stamp duty and can put more towards their deposit.

“Anyone buying a property for more than £937,000 will pay more stamp duty under the new bandings, with the increases becoming more dramatic the greater the value of the property. The result will be a much fairer system, although there will be a flurry of high-end exchanges today to beat the changes.

“While the changes will hit wealthier buyers in the pocket, they have to be fairer than a mansion tax as it's only a hit that is taken once. It will fundamentally change the way we view our homes: people will think much harder about moving as they are likely to stay put for a number of years. Big moves will be the order of the day rather than several staged moves, particularly for more expensive properties.”