Simple guide to the new Stamp Duty Land Tax changes

A simple guide to the new Stamp Duty Land Tax changes

A simple guide to the new Stamp Duty Land Tax changes - Credit: Archant

Fisher German’s guide to the Stamp Duty Land Tax changes

This chart shows a few examples of the changes

This chart shows a few examples of the changes - Credit: Archant

In his Autumn Statement George Osborne announced radical reforms to the method of calculating stamp duty. From 4th December the previous system, where buyers paid the percentage above thresholds on the entire purchase price, was levied progressively in a similar way to income tax.

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 bit up to £1.5 million and 12% on everything over that.

The above chart shows a few examples of the changes.

SDLT (Stamp Duty Land Tax) for residential property will apply to the part of the property price that falls within each rate band. There is no change to how SDLT is calculated on purchases of non-residential property or on the rent payable when a new lease is granted.

These changes apply to residential properties completed on or after 4 December 2014. Where contracts have been exchanged on or before 3 December 2014, and the transaction is completed on 4 December or later, buyers can choose whether to use the old or the new rules.

Stuart Flint, Head of Fisher German’s Agency Sector commented on the implications of the changes, “There will be short term nervousness for transactions at the upper end of the market, particularly over £1,500,000 but in the medium to long term there are many benefits to the new system for the lower and middle markets. The housing market was starting to show signs of lethargy and the announcement should provide some fresh impetus to certain sectors. The ‘slab’ structure of the previous system did distort values around the threshold figures and affected price behavior which will no longer be a strategic factor when selling. All in all I see the changes as favorable but vendors at the top of the market will have to be increasingly realistic about the ‘gross price’ of their property as this will make buyers ever-more sensitive to the total costs of acquisition”.

If you would like to check exactly what you’ll have to pay for residential purchases HMRC have a calculator on their website which works out the exact Stamp Duty Land Tax (SDLT).

If you have any queries about this issue please do not hesitate to contact the Agency Teams in any of our offices who would be delighted to help you. Visit

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