Stamp duty cut for 98% of buyers
Chancellor George Osborne has said stamp duty will be cut for 98% of homebuyers in his Autumn Statement to the Commons.
The chancellor said that the current system, where the amount owed jumps at certain price levels, would be replaced by a graduated rate, working in a similar way to income tax.
The changes come into force immediately.
The new stamp duty rates will only apply to the part of the property price that falls within the appropriate band, so there will no longer be a huge jump in stamp duty, for instance, on a property costing £500,001.
People currently in the process of purchasing a home can choose which regime to operate under. Under the new rules, no tax will be paid on the first £125,000 of a property, followed by 2% on the portion up to £250,000, 5% on the portion between £250,000 and £925,000, 10% on the next amount up to £1.5 million and 12% on everything over that.
The Treasury said someone buying a property at the average family home price of £275,000 would save £4,500, while a £2.1m purchase would carry £18,750 more stamp duty compared with the old system.
Analysts say the reform could put up house prices in some areas, predicting prices would rise where the tax had fallen, and fall where it had risen.
Mr Osborne said the tax cut, is worth £800m a year.