Stamp Duty Land Tax Changes – December 2014
The Chancellor yesterday announced transformational changes to the Stamp Duty Land Tax (SDLT) regime for residential purchases. The new system is a progressive system whereby each slice of the purchase price is taxed at the relevant rate compared to the old ‘slab’ system where you paid your relevant rate on the full purchase price.
Everyone buying at £937.5k or less will be unaffected or better off under the new system and nearly everyone buying above £937.5k will be worse off. See our comparison table for a quick and easy comparison of before and after at various purchases prices.
Old rules:
The old Stamp Duty Land Tax rules meant you simply looked at your purchase price and applied the relevant percentage from the table below to your full purchase price. For example on a £550,000 purchase you would pay 4% on the full £550k giving £22,000 SDLT payable.
| Purchase price | SDLT Rate payable on full purchase price |
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 1% |
| £250,001 to £500,000 | 3% |
| £500,001 to £1,000,000 | 4% |
| £1,000,001 to £2,000,000 | 5% |
| £2,000,001 and over | 7% |
New rules:
The new rules mean you ‘slice up’ your purchase price and apply the relevant percentages from the table below to each part of your purchase price. For example on a £550,000 purchase you would pay 0% on your first £125k, 2% on the slice between £125k and £250k i.e. £2500 and 5% on the £300k slice above £250k i.e. £15,000, giving a grand total of £17,500 payable. That’s a saving of £4,500 under the new rules.
| Purchase price bands | SDLT Rate on amount in that band |
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1,500,000 | 10% |
| £1,500,001 and over | 12% |
Winners / Losers:
98% of buyers will be better off according to Government figures. The really big winners under the new regime are those people buying just above the old thresholds. Someone buying at £150k will save £1,000, someone at £275k will save £4.5k and someone at £550k will save £4.5k.
The losers are nearly everyone buying at over £937.5k. Someone buying at £1.5m will be £18,750 worse off and someone at £3m will be £63,750 worse off.
When do the new rules apply from?
The rules came into effect at Midnight on Wednesday 3rd December 2014. Anyone who had exchanged and completed before that time falls under the old rules. If you had exchanged but NOT completed by Midnight 3/12/2014 you can select whether you use the old or the new scheme. Anyone who has not exchanged by that date must use the new rules.
What can I do?
If you have exchanged but not completed before Midnight 3/12/2014 you should carry out a comparison of the old and new rules and select the one which gives the lowest Stamp Duty liability.
As well as these changes to the residential rates there are many other areas of SDLT which are important to investors and developers. The higher rates to of SDLT to Corporate Bodies and the interaction of non-residential rates with residential rates creates a huge amount of complexity around Stamp Duty. This means that many investors and developers have paid too much stamp duty when buying properties.
Landstar Accountancy are Chartered Accountants who specialise in the property sector. We have had significant success in reviewing and reclaiming Stamp Duty on behalf of clients. We are currently offering a NO WIN NO FEE service to review and reclaim SDLT on any relevant transactions in the last 12 months, find out more here or give us a ring on 0203 3979 045 to find out more.
Comparison Old Rules vs New Rules:
| Purchase price | Old % Rate | New % Rate | Old SLDT payable |
New SDLT payable | Change |
| £50,000 | 0% | 0.00% | £0 | £0 | £0 |
| £100,000 | 0% | 0.00% | £0 | £0 | £0 |
| £150,000 | 1% | 0.33% | £1,500 | £500 | -£1,000 |
| £175,000 | 1% | 0.57% | £1,750 | £1,000 | -£750 |
| £200,000 | 1% | 0.75% | £2,000 | £1,500 | -£500 |
| £225,000 | 1% | 0.89% | £2,250 | £2,000 | -£250 |
| £250,000 | 1% | 1.00% | £2,500 | £2,500 | £0 |
| £275,000 | 3% | 1.36% | £8,250 | £3,750 | -£4,500 |
| £300,000 | 3% | 1.67% | £9,000 | £5,000 | -£4,000 |
| £325,000 | 3% | 1.92% | £9,750 | £6,250 | -£3,500 |
| £350,000 | 3% | 2.14% | £10,500 | £7,500 | -£3,000 |
| £375,000 | 3% | 2.33% | £11,250 | £8,750 | -£2,500 |
| £400,000 | 3% | 2.50% | £12,000 | £10,000 | -£2,000 |
| £425,000 | 3% | 2.65% | £12,750 | £11,250 | -£1,500 |
| £450,000 | 3% | 2.78% | £13,500 | £12,500 | -£1,000 |
| £475,000 | 3% | 2.89% | £14,250 | £13,750 | -£500 |
| £500,000 | 3% | 3.00% | £15,000 | £15,000 | £0 |
| £550,000 | 4% | 3.18% | £22,000 | £17,500 | -£4,500 |
| £600,000 | 4% | 3.33% | £24,000 | £20,000 | -£4,000 |
| £650,000 | 4% | 3.46% | £26,000 | £22,500 | -£3,500 |
| £700,000 | 4% | 3.57% | £28,000 | £25,000 | -£3,000 |
| £750,000 | 4% | 3.67% | £30,000 | £27,500 | -£2,500 |
| £800,000 | 4% | 3.75% | £32,000 | £30,000 | -£2,000 |
| £850,000 | 4% | 3.82% | £34,000 | £32,500 | -£1,500 |
| £900,000 | 4% | 3.89% | £36,000 | £35,000 | -£1,000 |
| £950,000 | 4% | 4.08% | £38,000 | £38,750 | £750 |
| £1,000,000 | 4% | 4.38% | £40,000 | £43,750 | £3,750 |
| £1,100,000 | 5% | 4.89% | £55,000 | £53,750 | -£1,250 |
| £1,200,000 | 5% | 5.31% | £60,000 | £63,750 | £3,750 |
| £1,300,000 | 5% | 5.67% | £65,000 | £73,750 | £8,750 |
| £1,400,000 | 5% | 5.98% | £70,000 | £83,750 | £13,750 |
| £1,500,000 | 5% | 6.25% | £75,000 | £93,750 | £18,750 |
| £1,600,000 | 5% | 6.61% | £80,000 | £105,750 | £25,750 |
| £1,700,000 | 5% | 6.93% | £85,000 | £117,750 | £32,750 |
| £1,800,000 | 5% | 7.21% | £90,000 | £129,750 | £39,750 |
| £1,900,000 | 5% | 7.46% | £95,000 | £141,750 | £46,750 |
| £2,000,000 | 5% | 7.69% | £100,000 | £153,750 | £53,750 |
| £2,100,000 | 7% | 7.89% | £147,000 | £165,750 | £18,750 |
| £2,200,000 | 7% | 8.08% | £154,000 | £177,750 | £23,750 |
| £2,300,000 | 7% | 8.25% | £161,000 | £189,750 | £28,750 |
| £2,400,000 | 7% | 8.41% | £168,000 | £201,750 | £33,750 |
| £2,500,000 | 7% | 8.55% | £175,000 | £213,750 | £38,750 |
| £2,600,000 | 7% | 8.68% | £182,000 | £225,750 | £43,750 |
| £2,700,000 | 7% | 8.81% | £189,000 | £237,750 | £48,750 |
| £2,800,000 | 7% | 8.92% | £196,000 | £249,750 | £53,750 |
| £2,900,000 | 7% | 9.03% | £203,000 | £261,750 | £58,750 |
| £3,000,000 | 7% | 9.13% | £210,000 | £273,750 | £63,750 |
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