Mortgage News

Stamp Duty Changes

As outlined in the Chancellor George Osborne's 2014 Autumn Statement, major changes to the way stamp duty land tax (SDLT) is charged on residential property purchases in England and Wales are now in effect.

From 00:00 on Thursday 4 December 2014, SDLT is charged at different rates depending on the portion of the purchase price that falls within a certain rate band.

Rates are applied only to the portion of the property's value that exceeds the relevant band threshold. This replaces the previous 'slab rate' system under which SDLT was charged against the total property value.

New SDLT rates and bands from 4 December 2014

Purchase price of property

Rate of SDLT (percentage of portion of purchase price)

£0 - £125,000 0%
£125,001 - £250,000 2%
£250,001 - £925,000 5%
£925,001 - £1.5 million 10%
Over £1.5 million 12%

If you exchanged contracts on or before 3 December 2014 but the transaction is completed on or after 4 December, you can choose whether you follow the new or the old rules.

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The changes are part of the Clean Growth Plan to reduce the UK's greenhouse emissions.

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