Changes to Stamp Duty Land Tax

Changes to Stamp Duty Land Tax

One of the key changes to come out of George Osborne’s 2014 Autumn Statement was in relation to Stamp Duty Land Tax. The new structure announced by the Chancellor of the Exchequer on 3rd December has generally been received well by the property industry and is set to bring scope for a new wave of Buyers, although transactions above £1.5m will be subject to a greater tax liability.

The new scale which is applied to all residential properties is as follows:

  • Sale price up to £125,000 – 0%
  • Sale price of £125,000 – £250,000 – 2% of the entire amount
  • Plus an additional 5% of the value between £250,001 and £925,000
  • Plus an additional 10% of the value between £925,001 and £1,500,000
  • Plus an additional 12% of the value above £1,500,001

In practice, a property which is purchased for £600,000 will now attract SDLT of £20,000 as appose to £24,000 payable under the previous flat rate of 4%, making a saving of £4,000 to the Buyer.

A property purchased for £2,000,000 however will now attract SDLT of £153,750 as appose to £80,000 payable under the previous rate, equating to a £73,750 increase in tax to the Buyer.

These new changes, which have come into immediate effect, only apply to single residential dwellings, and do not impact commercial or business transactions.

We expect these changes to have a positive impact to property values around the previous SDLT thresholds of £250,000 and £500,000, which were previously seen as a barrier, which this new sliding scale removes.



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