Posted by Nick Day on 03 Dec 2014

Stamp Duty Land Tax (SDLT) Changes

The Chancellor’s Autumn Statement set out changes to Stamp Duty Land Tax (SDLT) that were introduced from midnight 4 December 2014.

SDLT will now be charged on residential property at the rate applicable for each slice of the property value falling in each band, rather than the whole value at the applicable rate. The bands and rates are:

  • 0% paid for the first £125,000.
  • 2% on the portion from £125,000 up to £250,000.
  • 5% from £250,000 up to £925,000.
  • 10% from £925,000 up to £1.5m.
  • 12% on anything above £1.5m.

Relief for disposals of multiple dwellings still has a minimum rate applicable to the total proceeds of 1%.

SDLT Banded System

While we are pleased to see the change to a banded system that will avoid the market distortion around the thresholds caused by the previous system, it is disappointing to see that SDLT is still being charged on properties worth as little as £125,001.

Additionally, commercial and mixed use properties are still subject to the previous system of a single rate applicable to the entire purchase price.  If a banded system is deemed more equitable for residential property, it seems inconsistent to not extend that treatment to also cover commercial property. High-value residential properties purchased by companies are also still subject to a flat rate of 15%.

The introduction of the banded system for residential properties is a welcome modernisation, but the failure to include commercial and mixed use properties means the Chancellor’s changes fall short of being the full update that this controversial tax requires.

Contact Tax Innovations about SDLT

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See also…

Stamp Duty Land Tax

Tax Relief For Residential Mortgages

Finance Act 2018 Enacted

Property Partnership Incorporation and SDLT

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